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Final!Report!

Towards(the(development(of((a(UK(Peatland(Code((Payments!for!Ecosystem!Services!(PES)!Pilot!Research!Project!

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Project!code:!NE0141!September!2013!

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Contents((Executive!Summary! ! ! ! ! ! ! ! ! ! 4!!1(Introduction( ( ( ( ( ( ( ( ( ( ( 10(!2(The(role(of(peatland(restoration(in(climate(regulation( ( ( ( ( 13(

2.1!Extent!and!condition!of!peatlands!in!the!UK! ! ! ! ! ! 14!2.2!Mitigation!potential!of!UK!peatland!restoration! ! ! ! ! ! 15!2.3!Measuring!changes!in!peatland!GHG!emissions!after!restoration!! ! ! 17!

!3(Policy(and(Market(Background( ( ( ( ( ( ( ( 19(

3.1!International!climate!change!policy!and!peatlands! ! ! ! ! 19!3.2!The!market!for!peatland!restoration! ! ! ! ! ! ! 19!

(4.(UK(Peatland(Code(Development( ( ( ( ( ( ( ( 20(

4.1!Overview! ! ! ! ! ! ! ! ! ! 24!4.2!Approach!to!additionality! ! ! ! ! ! ! ! 26!4.3!Approach!to!permanence! ! ! ! ! ! ! ! 26!4.4!Monitoring! ! ! ! ! ! ! ! ! ! 27!4.5!CoWbenefits! ! ! ! ! ! ! ! ! ! 28!

!5(Discussion(and(conclusions( ( ( ( ( ( ( ( ( 29(!References! ! ! ! ! ! ! ! ! ! ! 37!Glossary!! ! ! ! ! ! ! ! ! ! ! 40!Acknowledgements! ! ! ! ! ! ! ! ! ! 43!Limitations!and!disclaimer! ! ! ! ! ! ! ! ! 43!!Appendices! ! ! ! ! ! ! ! ! ! ! 44!

Appendix!1:!UK!Peatland!Code! ! ! ! ! ! ! ! 45!Appendix!2:!Response!to!public!feedback!on!draft!Code! ! ! ! ! 73!Appendix!3:!Market!Research!Report! ! ! ! ! ! ! 107!Appendix!4:!Leaflet! ! ! ! ! ! ! ! ! ! 117!

!(((Suggested(citation(Reed!MS,!Bonn!A,!Evans!C,!Joosten!H,!Bain!B,!Farmer!J,!Emmer!I,!Couwenberg!J,!Moxey!A,!Artz!R,!Tanneberger!F,!von!Unger!M,!Smyth!M,!Birnie!R,!Inman!I,!Smith!S,!Quick!T,!Cowap!C,!Prior!S,!Lindsay!RA!(2013)!Peatland(Code(Research(Project(Final(Report,!Defra,!London.(

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Executive(Summary(!This!Final!Report!describes!research!into!the!rationale!and!basis!for!the!development!of!a!UK!Peatland!Code.!The!development!of!the!Code!was!supported!by!the!latest!relevant!research!evidence,!via!an!international!expert!workshop,!and!by!feedback!from!the!Code’s!Steering!Group!and!17!individuals/organisations!from!across!the!UK.!The!Code!was!launched!in!September!2013,!at!the!start!of!an!18Wmonth!pilot!phase!of!operation,!in!which!the!Code!will!be!further!developed,!and!is!available!online:!http://www.iucnWukWpeatlandprogramme.org/peatlandWcode.!

There!is!growing!interest!in!the!creation!of!new!markets!to!facilitate!private!investment!in!the!provision!of!ecosystem!services,!and!this!was!a!key!emphasis!of!Defra’s!2011!Natural!Environment!White!Paper.!The!White!Paper!led!to!the!formation!of!an!Ecosystem!Markets!Taskforce!to!identify!business!opportunities!in!the!natural!environment!that!recommended!the!development!of!a!UK!Peatland!Code!in!its!report!in!March!2013.!!Subsequently!in!May!2013,!Defra!published!an!action!plan!for!developing!the!potential!for!payments!for!ecosystem!services!in!which!it!committed!to!work!in!partnership!with!the!IUCN!and!others!to!support!the!testing,!development!and!launch!later!in!2013!of!a!pilot!UK!Peatland!Code.!!

UK!peatlands!are!a!relevant!!place!to!explore!the!potential!to!pay!for!ecosystem!services,!given!the!range!and!importance!of!ecosystem!services!that!they!supply,!and!that!fact!that!many!of!these!service!are!not!widely!or!fully!paid!for!via!agricultural!support!payments!or!by!markets.!This!has!led!to!the!degradation!of!many!peatlands!through!inappropriate!burning,!overWgrazing!and!drainage,!leading!to!reductions!in!carbon!storage,!water!quality!and!biodiversity.!Investing!in!conserving!and!restoring!peatlands!is!therefore!a!key!tool!to!help!deliver!the!UK’s!climate!change!obligations,!whilst!helping!meet!other!national!and!international!obligations!on!biodiversity!and!water!quality.!

Although!there!is!growing!interest!from!the!private!sector!in!paying!for!some!of!these!ecosystem!services,!and!there!have!been!a!small!number!of!bilateral!agreements!to!pay!for!peatland!restoration!via!the!Corporate!Social!Responsibility!market,!there!is!a!need!to!develop!guidance,!frameworks!and!monitoring!to!provide!sponsors!with!the!confidence!necessary!to!restore!peatlands!on!any!significant!scale.!!

This!Payment!for!Ecosystem!Service!(PES)!pilot!research!project!therefore!conducted!the!research!necessary!to!develop!and!launch!a!UK!pilot!Peatland!Code,!designed!to!support!markets!that!could!pay!for!the!restoration!and!reWwetting!of!degraded!peatlands!across!the!UK.!The!research!project!and!subsequent!Code!drew!significantly!on!Defra’s!PES!Best!Practice!Guide,!first!identifying!a!saleable!ecosystem!service!and!prospective!buyers!and!sellers,!based!on!previous!work!and!new!market!research!conducted!as!part!of!this!project!(Phase!1!in!the!PES!Guide).!The!Code!establishes!the!principles!for!a!peatland!PES!scheme,!and!resolves!a!number!of!technical!issues,!to!make!it!possible!for!buyers!and!sellers!to!work!together!for!peatland!restoration!(Phase!2!in!the!PES!Guide).!The!Code!also!provides!guidance!on!contracts!and!monitoring!(Phases!3!and!4!of!the!PES!Guide),!and!takes!a!bundled!approach!to!PES!(a!‘premium!carbon’!scheme!that!provides!a!range!of!coWbenefits),!whilst!not!ruling!out!the!possibility!of!layered!schemes!(e.g.!using!the!Code!to!elicit!payments!for!climate!mitigation!benefits!on!top!of!existing!schemes!that!pay!for!water!quality!benefits)!(Phase!5!of!the!PES!Guide).!The!research!offers!a!number!of!insights!into!the!creation!of!markets!for!ecosystem!services!linked!to!peatland!restoration.!It!also!offers!insights!of!more!general!relevance!to!the!creation!and!

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implementation!of!new!markets!for!ecosystem!services,!which!may!be!of!relevance!to!other!habitats!and!ecosystems!in!the!UK,!and!to!the!development!of!new!PES!schemes!internationally.!!

Table!1!provides!an!overview!of:!the!concept!behind!the!Code;!buyers,!sellers!and!intermediaries!and!associated!issues;!other!challenges;!an!overall!assessment!of!whether!there!is!proof!of!concept;!potential!for!wider!application!beyond!the!study!area;!and!the!legacy!and!next!steps.!The!rest!of!this!summary!considers!the!wider!lessons!that!have!been!learned!from!this!Pilot!for!Defra’s!wider!agenda!on!Payments!for!Ecosystem!Services.!

Table(1:!Overview!of!Peatland!Code!PES!pilot.!

Concept( This!PES!pilot!set!out!to!conduct!the!research!necessary!to!develop!a!UK!Peatland!Code!that!can!provide!the!basis!for!business!investment!in!effective!peatland!restoration!that!delivers!a!range!of!ecosystem!services!

Buyers( Market!research!demonstrated!that!there!is!an!appetite!for!Corporate!Social!Responsibility!sponsorship!of!peatland!restoration!projects!in!the!UK,!with!companies!prepared!to!pay!a!premium!for!projects!connected!to!their!business!that!could!deliver!multiple!benefits:!

• Broadly!speaking,!two!types!of!potential!investors!emerged!from!this!analysis:!i)!multiWnationals!with!UK!brand!identity,!and!a!substantial!UK!customer!and/or!employee!base!in!relatively!close!proximity!to!peatland!restoration!sites!who!wish!to!build!brand!awareness!&!loyalty.!This!group!was!more!interested!in!the!possibility!of!future!trading/accounting,!though!for!those!with!large!emissions!the!coWbenefits!were!more!important;!and!ii)!Small!and!MediumWsized!Enterprises!(SMEs)!with!brand!or!product!lines!linked!to!peatlands!e.g.!food!and!drink,!hospitality/tourism.!This!group!were!more!interested!in!the!full!range!of!benefits!from!peatland!restoration!to!help!market!products!

• Sectors!with!particular!interests!in!peatland!restoration!included:!i)!food!&!drink!(marketing!brands!and!product!lines!linked!to!peat/uplands!e.g.!fell!bred!lamb,!spring!water!products,!whiskey!etc.);!ii)!hospitality/tourism!linked!to!uplands;!iii)!energy!(compensating!damage!from!infrastructure!on!peatlands);!iv)!water!(capturing!the!carbon!benefits!of!work!for!carried!out!primarily!for!water!quality!benefits);!and!v)!horticulture!(enhancing!peatWfree!brands)!

• Companies!interviewed!for!this!research!were!primarily!interested!in!the!carbon!benefits!of!peatland!restoration,!and!wanted!rigorous!quantification!of!this!benefit.!However!they!were!also!interested!in!particular!in!biodiversity,!followed!by!water!quality!(especially!water!utilities!and!companies!with!large!water!usage).!Interviewees!were!content!for!these!coWbenefits!to!be!vouched!for!by!an!expert!panel!or!to!be!delivered!via!a!wellWknown!NGO!that!they!trust!

• The!companies!interviewed!were!generally!prepared!to!pay!a!premium!for!UK!projects!that!could!deliver!multipleWbenefits.!They!were!content!to!see!bespoke!pricing!of!projects!to!reflect!the!location!and!range!of!coWbenefits!that!might!link!to!different!product!lines.!The!key!price!differential!was!between!UK!peatland!restoration!schemes!and!nonWUK!multiple!benefit!schemes!(rather!than!other!UK!landWbased!projects)!

Key!challenges!associated!with!buyers!include:!

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• The!majority!of!Corporate!Social!Responsibility!(CSR)!in!the!UK!is!focused!on!delivering!social!benefits!in!developing!countries.!Market!research!suggests!that!the!UK!Peatland!Code!may!benefit!from!identifying!social!benefits,!and!to!this!end,!options!have!been!created!for!sponsors!to!donate!towards!social!projects!linked!to!restoration!

• During!the!pilot!phase,!sponsorship!can!only!be!on!the!basis!of!CSR,!not!for!offsetting!purposes.!However,!businesses!would!like!information!about!the!likely!value!of!their!investments!per!tonne!of!CO2Wequivalent,!so!that!sponsorship!of!projects!under!the!Code!could!be!considered!investment!in!a!potential!future!asset,!which!could!reasonably!provide!a!future!return!on!investment,!assuming!it!were!possible!to!trade!carbon!from!peatland!restoration!in!future.!This!has!been!addressed!in!the!development!of!a!flyer!explaining!the!Code!to!potential!sponsors!(Appendix!4).!Further!financial!modelling!of!the!costs!and!benefit!to!buyers!would!also!be!helpful!during!the!pilot!phase.!!

• The!climate!mitigation!benefits!of!peatland!restoration!are!not!as!immediately!obvious!and!tangible!as!tree!planting,!and!peat!bogs!are!not!as!immediately!appealing!to!corporate!stakeholders!as!forests.!It!will!therefore!be!important!to!communicate!clearly!around!the!benefits!of!peatland!restoration!(see!flyer!in!Appendix!4)!

• When!prioritizing!public!investment!in!peatland!restoration,!it!is!necessary!to!prioritise!the!most!degraded!sites!where!there!are!greatest!carbon!and!biodiversity!gains,!c.f.!the!WISE!approach!in!Scotland.!However,!it!is!likely!that!marketWbased!criteria!will!dictate!the!location!of!many!sites!that!are!restored!under!the!Peatland!Code!e.g.!sites!that!are!located!close!to!a!company’s!customer!base!or!operations.!This!should!not!be!problematic!because!the!Code!ensures!that!all!sites!will!provide!climate!mitigation!benefits!(with!associated!coWbenefits)!that!are!additional,!and!provides!other!safeguards!to!ensure!that!the!market!delivers!real!environmental!benefits.!The!report!therefore!suggests!that!it!may!be!worth!considering!whether!public!funding!can!be!prioritized!in!the!sites!that!are!least!likely!to!be!restored!under!the!Code!(e.g.!particularly!remote!sites).!

Sellers( Although!they!will!need!to!work!in!close!collaboration!with!land!managers!and!tenants,!sellers!engaging!with!the!UK!Peatland!Code!are!likely!to!primarily!be!landowners,!as!they!are!able!to!enter!into!contractual!agreements!with!sponsors!to!undertake!restoration!to!secure!benefits!over!the!longWterm.!However,!sellers!are!obliged!to!consult!with!tenants!and!land!managers!where!relevant,!and!a!range!of!other!stakeholders!who!have!rights!over!the!land!that!is!to!be!restored,!including!regulators!who!may!have!strategies!that!work!either!in!opposition!or!synergy!with!aspirations!for!peatland!restoration.!!

It!is!anticipated!that!the!majority!of!sellers!during!the!pilot!phase!are!likely!to!be!landowning!conservation!NGOs!and!charities,!many!who!already!have!existing!objectives!around!peatland!restoration!that!could!be!met!through!corporate!sponsorship.!

Several!issues!may!reduce!participation!from!private!landowners!during!the!pilot!phase!of!the!Code’s!operation,!including!contract!lengths,!uncertainty!around!interactions!with!agricultural!payments!and!the!possibility!that!restored!land!may!fall!under!statutory!designations!that!could!limit!future!changes!in!management.!These!issues!will!

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be!explored!during!the!pilot!phase,!to!generate!options!that!can!reduce!risk!for!this!group!and!make!more!land!available!for!restoration!under!the!Code.!

Due!to!the!high!ongoing!costs!of!monitoring!coWbenefits!in!detail,!the!Code!strongly!encourages!detailed!monitoring!of!coWbenefits!wherever!possible,!but!where!this!is!not!possible,!suggests!that!projects!may!create!a!narrative!based!on!published!evidence!and!include!this!in!their!Environmental!Statement.!This!is!designed!to!provide!sponsors!with!information!about!the!likely!coWbenefits!in!a!particular!site,!on!the!basis!of!credible!evidence,!but!without!requiring!expensive!ongoing!monitoring.!

Intermediaries( A!range!of!intermediaries!have!expressed!interest!in!working!with!buyers!and!sellers!under!the!UK!Peatland!Code.!It!is!possible!for!buyers!and!sellers!to!organize!biWlateral!contracts!under!the!Code!without!the!assistance!of!an!intermediary,!and!it!is!possible!that!groups!of!sellers!(e.g.!conservation!NGOs!and!charities)!may!selfWorganise!to!pool!expertise!and!organize!contracts!under!the!Code!without!the!assistance!of!intermediaries.!However,!given!the!complexity!of!the!Code,!it!is!likely!that!intermediaries!will!work!with!the!majority!of!buyers!and!sellers,!with!the!assistance!of!a!range!of!landWbased!professionals!e.g.!Chartered!Surveyors.!

Proof(of(concept( A!draft!Peatland!Code!has!been!developed,!and!revised!in!response!to!feedback!from!a!wide!range!of!organisations!with!interests!and!expertise!in!this!area.!A!marketing!pitch!to!potential!sponsors!has!been!developed!(Appendix!4)!and!tested!with!a!range!of!potential!corporate!investors,!who!gave!positive!feedback.!However,!proof!of!concept!depends!upon!attracting!corporate!sponsorship!of!peatland!restoration!projects,!and!the!successful!operation!of!the!Code!to!channel!these!investments!into!peatland!restoration!(including!the!successful!use!of!the!metrics!that!underpin!it).!

Transferability( The!UK!is!now!widely!perceived!to!be!leading!the!PES!agenda!in!Europe,!and!the!UK!Peatland!Code!has!the!potential!to!become!a!template!for!similar!initiatives!internationally.!The!expertise!developed!through!this!pilot!research!project!may!make!it!possible!to!develop!markets!for!other!habitats!and!ecosystem!services!in!future,!and!for!the!UK!to!help!other!countries!develop!regional!carbon!markets!for!peatlands.!The!project!has!already!been!invited!to!present!experience!developing!the!UK!Peatland!Code!to!a!conference!organized!by!the!German!Federal!Agency!for!Nature!Conservation!(BfN)!in!coWoperation!with!the!European!Network!of!Heads!of!Nature!Conservation!Agencies!(ENCA),!and!other!opportunities!are!being!explored!by!members!of!the!project!team.!

Legacy(and(next(steps(

A!draft!UK!Peatland!Code!is!being!launched!in!September,!initiating!a!pilot!implementation!phase!in!which!the!Code!will!be!further!developed!and!tested.!The!aim!of!the!pilot!phase!is!to!encourage!early!sponsorship!of!peatland!restoration!to!help!demonstrate!peatland!benefits!and!build!an!increasingly!robust!evidence!base!and!methodology!for!future!phases!of!Code!development.!Lasting!18!months,!the!pilot!implementation!phase!will!focus!on!further!developing!infrastructure!for!the!Code,!including:!testing!and!refining!proxy!models!for!carbon!monitoring!and!developing!a!standardised!field!protocol!for!vegetation!monitoring;!developing!evidenceWbased!financial!analysis!of!the!various!lifeWcycle!costs!associated!with!investing!in!peatland!restoration;!and!work!with!the!UK!Accreditation!Service!and!existing!thirdWparty!UKASWaccredited!auditors!to!develop!protocols!to!assess!and!accredit!auditors!and!projects!under!the!Peatland!Code.!The!goal!is!to!develop!a!registry!for!Peatland!Code!projects!to!issue!and!record!ownership!and!transfers!of!GHG!emission!reduction!credits!and!their!

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retirement!(see!glossary),!cancellation!or!suspension!under!different!circumstances.!!

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A!number!of!broader!lessons!may!be!extracted!from!this!research!for!Defra’s!wider!PES!agenda:!!

• PES(schemes(are(not(inconsistent(with(protecting(nature(for(its(intrinsic(value.!In!the!same!way!that!society!puts!a!value!on!the!services!people!provide!to!the!economy!and!put!an!economic!value!on!a!healthy!workforce!without!putting!a!value!on!a!human!life,!there!is!no!contradiction!in!believing!in!the!intrinsic!value!of!nature,!whilst!also!valuing!the!services!it!provides.!Society!invests!in!public!health!programmes!primarily!because!we!value!human!life,!but!it!also!makes!economic!sense!to!have!a!healthy!workforce.!In!the!same!way,!it!is!possible!to!invest!in!nature!conservation!primarily!because!we!intrinsically!value!nonWhuman!life,!but!as!this!research!has!demonstrated,!there!is!also!a!strong!case!that!healthy!ecosystems!bring!many!benefits!to!our!economy!and!society,!that!the!private!sector!is!willing!to!pay!for.!Rather!than!‘putting!a!price!on!nature’,!the!Code!is!intended!to!facilitate!the!discovery!and!expression!of!some!of!the!formerly!overlooked!benefits!provided!by!nature!from!peatlands,!that!investors!may!now!ascribe!tangible!value!to,!via!investing!in!restoration.!

• A!number(of(generally(applicable!benefits(or(motivations(for(business(to(engage(with(PES(schemes(may(be(inferred(from(this(research,!for!example:!for!some!business!sectors,!investing!in!PES!schemes!can!help!reduce!costs!(e.g.!water!intensive!industries!or!business!that!require!high!water!quality);!for!other!companies,!PES!may!be!an!opportunity!to!meet!environmental!obligations;!PES!can!demonstrate!corporate!responsibility!towards!the!natural!environment!;!and!some!businesses!may!be!able!to!use!PES!schemes!to!market!specific!product!lines!linked!to!particular!habitats!or!services.!!

• To(avoid(unintended(consequences(and(provide(investors(with(the(necessary(confidence,(PES(markets(need(appropriate(guidance,(frameworks(and(monitoring.!!Such!guidance!needs!to!ensure!that:!benefits!are!new!and!would!not!otherwise!have!occurred!(‘additionality’);!benefits!are!not!lost!or!reversed!in!future;!the!PES!scheme!does!not!result!in!‘leakage’!wherein!damaging!activities!are!simply!transferred!elsewhere;!benefits!are!appropriately!monitored!and!quantified;!and!payments!for!one!ecosystem!service!do!not!lead!to!tradeWoffs!with!other!ecosystem!services!that!are!currently!outside!the!market!

• It(is(likely(that(codes(of(practice(will(need(to(be(developed(on(a(habitatQbyQhabitat(basis.!If!there!is!a!proliferation!of!guidance!for!different!habitats!(or!services)!in!future,!there!may!be!a!role!for!Government!to!ensure!standardisation!of!approaches!and!coWordinate!between!schemes.!For!example,!it!may!be!possible!to!develop!a!combined!code!for!landWbased!carbon!

• Landowners(tend(to(favour(less(risky,(shortQterm(agreements(to(provide(ecosystem(services,(but(investors(and(Government(need(to(ensure(these(benefits(are(secured(for(the(longQterm(and(not(reversed.(This!may!limit!the!range!of!sellers!willing!to!enter!PES!schemes,!making!it!hard!to!meet!demand!and!target!the!most!degraded!sites!

• Engaging(local(stakeholders(early(on(in(the(development(process(helps(create(the(right(conditions(for(PES(schemes(to(develop(successfully.!Techniques!such!as!participatory!mapping!and!modelling!enable!better!understanding!of!different!ecosystems!services!under!a!variety!of!scenarios,!enabling!tradeWoffs!to!be!negotiated,!and!priorities!agreed(

• There(are(a(number(of(ways(to(avoid(payments(for(one(service((e.g.(climate(regulation(or(water(quality)(leading(to(tradeQoffs(with(other(services(that(are(harder(to(monetise(and(market((e.g.(biodiversity(or(aesthetic(benefits).(One!option!is!to!create!additional!markets!

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for!as!many!of!these!additional!services!as!possible,!and!run!these!in!parallel!and!coWordinated!with!each!other!in!the!same!landscape.!An!alternative!is!to!‘bundle’!these!coWbenefits!with!the!anchor!service,!which!can!then!be!marketed!at!a!higher!price,!effectively!paying!for!the!coWbenefits!but!without!the!need!for!such!rigorous!monitoring!of!coWbenefits.!!

• Integration(of(private(PES(with(public(PES(via(agriQenvironmental(schemes(is(technically(feasible,(and(may(lead(to(a(number(of(potential(benefits(and(challenges.!The!Code!allows!for!joint!funding!of!peatland!restoration!from!both!private!funding!and!agriWenvironment!schemes.!The!detailed!mechanisms!for!how!this!integration!might!be!achieved!in!practice!will!be!explored!during!the!pilot!phase!of!the!Code’s!operation.!!

• Permanence(can(be(achieved(beyond(the(end(of(contracts(for(peatland(restoration(projects.(The!Code!addresses!the!permanence!(see!glossary)!issue!legally!through!covenants!placed!on!the!land,!and!practically!through!a!process!of!assessing!and!managing!the!risks!of!restoration!being!reversed.!!

The!UK!Peatland!Code!is!a!frontWrunner!in!the!development!of!guidance,!frameworks!and!monitoring!to!underpin!the!development!of!PES!schemes!in!the!UK.!The!experience!and!expertise!gained!during!this!Defra!PES!Pilot!research!project,!combined!with!best!practice!guidance,!may!be!used!to!extend!PES!to!a!range!of!habitats!and!ecosystem!services!across!the!UK!and!internationally.!PES!schemes!are!not!without!challenges.!Some!of!these!challenges!are!more!conceptual!in!nature,!for!example!questions!around!the!‘neoWliberalisation’!of!conservation!policy!and!social!justice.!Other!challenges!are!more!practical,!for!example!guaranteeing!the!permanence!of!GHG!emission!reductions!and!determining!how!private!payments!for!ecosystem!services!may!interface!with!public!payments!via!agriWenvironment!schemes.!Although!many!of!these!conceptual!and!practical!challenges!are!still!to!be!resolved,!the!development!of!the!UK!Peatland!Code!has!provided!an!opportunity!to!tackle!a!number!of!them.!This!has!been!successful!enough!for!us!to!be!able!to!launch!a!pilot!phase!of!operation,!in!which!it!will!be!possible!to!further!investigate!and!tackle!the!remaining!challenges!entailed!in!successfully!operating!PES!schemes!for!the!restoration!of!UK!peatlands.!!

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1. Introduction(!

This!DefraWfunded!Payment!for!Ecosystem!Service!(PES)!Pilot!research!project!conducted!the!research!necessary!to!develop!and!launch!a!UK!Peatland!Code,!designed!to!support!markets!that!could!pay!for!the!restoration!and!reWwetting!of!degraded!peatlands!across!the!UK.!This!was!done!through!a!combination!of!market!and!deskWbased!research!plus!a!workshop!with!around!20!international!experts!in!Germany.!In!this!way!it!was!possible!to!ensure!that!Code!development!was!based!on!the!latest!available!evidence,!whilst!learning!from!experience!developing!markets!for!peatland!restoration!in!Germany!and!elsewhere!internationally.!Specifically,!the!objectives!of!the!research!were!to:!

1.!identify!the!components!required!for!a!pilot!phase!UK!Peatland!Code;!

2.!conduct!market!research!to!better!understand!the!preferences!of!potential!buyers!and!ensure!the!code!caters!for!their!needs;!

3.!develop!and!launch!a!pilot!implementation!phase!for!the!UK!Peatland!Code!to!support!peatland!restoration!pilot!projects!funded!through!private!investment!(investment!was!sought!separately!in!parallel!with!this!research!project);!and!

4.!facilitate!knowledge!exchange!between!existing!DEFRA!and!other!related!projects!and!initiatives!to!inform!further!Code!development.!

Intact!peatlands!provide!many!important!ecosystem!services,!including!climate!regulation!through!carbon!sequestration!and!storage,!water!regulation,!provision!of!palaeoWenvironmental!archives!and!recreation!opportunities,!as!well!as!provision!of!habitats!for!nationally!and!internationally!important!wildlife!(Bonn!et(al.,!under!review).!When!drained,!however,!peatlands!can!turn!into!significant!sources!of!greenhouse!gas!(GHG)!emissions!and!affect!water!quality,!human!health!and!biodiversity!(Parish(et(al.!2008;!Bonn(et(al.!2009b;!van!der!Wal(et(al.!2011).!Drained!organic!soils!with!low!water!tables!continue!to!degrade!and!to!emit!CO2,!until!drainage!is!reversed.!Degraded!peatlands!are!responsible!globally!for!25%!of!CO2!emissions!from!the!land!use!sector,!and!in!the!European!Union!for!75%!of!GHG!emissions!from!agricultural!land!use!(Joosten!2009).!Degraded!peatlands!pose!a!high!risk!and,!ultimately,!high!cost!to!society,!albeit!one!currently!outside!of!markets.!

Peatlands!have!therefore!been!identified!as!a!priority!for!action!under!international!agreements!(Stoneman(et(al.!2013).!Global!agreements!such!as!the!UN!Convention!on!Biological!Diversity!(CBD)!and!the!Nagoya!protocol,!the!UN!Framework!Convention!on!Climate!Change!(UNFCCC)!and!its!Kyoto!Protocol,!and!the!Ramsar!Convention!on!Wetlands,!promote!peatland!restoration!as!a!key!contribution!towards!reaching!biodiversity!and!climate!targets!(Joosten!2011).!Peatland!restoration!may!also!be!able!to!help!deliver!on!Defra’s!Biodiversity!2020!targets1!and!equivalent!biodiversity!strategies!in!the!Devolved!Administrations.!!

In!the!UK,!the!IUCN!UK!Commission!of!Inquiry!on!Peatlands!reported!that!over!80!%!of!UK!peatlands!have!been!damaged,!largely!as!a!result!of!drainage!for!agriculture,!forestry,!track!building!or!peat!extraction.!In!line!with!national!and!international!obligations!on!biodiversity!and!climate,!such!as!the!2020!EU!Biodiversity!Strategy!(European!Commission!2011),!the!IUCN!UK!Commission!of!Inquiry!on!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!1 See: https://www.gov.uk/government/publications/biodiversity-2020-a-strategy-for-england-s-wildlife-and-ecosystem-services

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Peatlands!suggested!a!target!of!1!million!hectares!(ha)!of!peatlands!in!good!condition!or!under!restoration!management!by!2020!(Bain(et(al.!2011).!

Given!growing!national!and!global!political!recognition!of!the!climate!mitigation!benefits!of!conserving!and!restoring!peatlands,!reinforcing!their!established!biodiversity!value!(Littlewood!et(al.,!2010),!opportunities!to!fund!these!activities!have!greatly!increased.!However,!to!achieve!restoration!at!the!scale!suggested!by!Bain!et(al.!(2011)!in!the!UK,!and!to!reverse!peatland!degradation!at!a!global!scale,!a!combination!of!public!and!private!investment!is!likely!to!be!needed.!Although!the!Kyoto!Protocol!created!an!international!market!for!carbon!under!the!UK!Framework!Convention!on!Climate!Change!(known!as!the!‘compliance!market’),!it!would!require!legislative!changes!at!EU!and!country!level!for!these!markets!to!be!used!to!support!peatland!restoration!in!Europe.!Voluntary!carbon!markets!are!now!trading!peatland!carbon!in!Central!and!Eastern!Europe,!but!this!market!has!been!limited!by!a!weak!voluntary!carbon!price,!combined!with!high!accreditation!costs.!Although!the!Corporate!Social!Responsibility!market!may!be!more!likely!to!cover!restoration!costs,!this!is!a!much!smaller!market.!There!is!therefore!growing!interest!in!the!creation!of!regional!carbon!markets,!selling!the!climate!benefits!of!restoration!to!buyers!within!the!same!region!or!country,!and!lowering!accreditation!costs!while!adapting!schemes!more!effectively!to!local!conditions!(Bonn!et(al.,!under!review).!!

The!potential!to!develop!a!regional!carbon!market!for!peatland!restoration!in!the!UK!was!first!explored!in!the!Rural!Economy!&!Land!Use!programme!Sustainable!Uplands!project!(Worrall(et(al.!2009;!Settelmyer!&!Eaton!2010).!This!led!to!a!call!from!across!the!peatland!research,!policy!and!practitioner!community!for!the!development!of!a!UK!Peatland!Code!at!the!IUCN!UK!Peatland!Programme!conference!in!Stirling,!in!2011.!Soon!after!this,!the!Government’s!2011!Natural!Environment!White!Paper!The(Natural(Choice!(HM!Government!2011)!was!published,!emphasising!the!creation!of!new!markets!to!pay!for!ecosystem!services.!The!White!Paper!announced!the!formation!of!an!Ecosystem!Markets!Taskforce,!to!identify!business!opportunities!in!light!of!the!National!Ecosystem!Assessment.!Initial!evidence!gathering!for!the!Taskforce!ranked!a!UK!Peatland!Code!as!their!joint!top!opportunity!out!of!44!submitted!opportunities!by!the!Taskforce,!and!it!recommended!the!development!of!a!robust!code!for!peatland!restoration!in!its!final!report!in!March!2013.!The!Natural!Environment!White!Paper!committed!to!producing!a!Payment!for!Ecosystem!Service!Best!Practice!Guide,!which!Defra!published!in!May!2013,!featuring!the!Peatland!Code!as!a!case!study.!The!White!Paper!also!committed!to!producing!a!Payment!for!Ecosystem!Service!Action!Plan,!which!Defra!also!published!in!May!2013,!and!which!highlighted!peatland!restoration!via!the!Peatland!Code!as!one!of!five!specific!opportunity!areas.!The!PES!Action!Plan!made!a!commitment!for!Defra!to!work!in!partnership!with!the!IUCN!and!others!to!support!the!testing,!development!and!launch!of!a!pilot!Peatland!Code!later!in!2013.!In!July!2013,!the!Committee!on!Climate!Change!(an!independent,!statutory!body!established!under!the!Climate!Change!Act!2008)!also!highlighted!the!development!of!a!Peatland!Code!as!a!“key!priority”,!drawing!on!evidence!from!Defra’s!PES!Action!Plan.!In!a!letter!to!the!IUCN!UK!Peatland!Programme!(5th!February!2013),!the!four!country!Ministers!welcomed!the!IUCN’s!work!and!set!out!a!framework!for!action!including!coWoperation!and!coWordinated!action!to!support!the!development!of!the!Peatland!Code.!This!intention!was!reWiterated!in!the!UK!Government’s!National!Adaptation!Plan!in!July!2013.!

To!address!these!calls!for!action,!the!IUCN!UK!Peatland!Programme!and!the!NERC!Valuing!Nature!Network!project!‘Valuing!Peatlands:!Assessing!and!valuing!peatland!ecosystem!services!for!sustainable!management’!led!to!stakeholder!discussions!in!2012!to!prepare!a!route!map!towards!a!

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! 12!

Peatland!Code!for!the!UK.!Participants!included!representatives!from!the!business,!policy!and!practitioner!communities,!scientists!and!carbon!market!consultants.!Building!on!this!momentum,!this!PES!Pilot!research!project!funded!by!the!UK!Government’s!Department!for!Environment,!Food!&!Rural!Affairs!(DEFRA)!has!supported!the!actual!development!of!a!pilot!UK!Peatland!Code.!This!research!PES!Pilot!project!has!been!conducted!in!parallel!with!a!project!funded!by!DEFRA!and!Natural!England!to!adapt!a!proxyWbased!approach!for!costWeffective!monitoring!of!GHG!emission!savings!from!restoration!projects!to!the!UK!context!(Quick!et(al.,!2013;!Birnie!and!Smyth,!2013).!It!also!builds!on!experience!developing!a!regional!carbon!market!for!UK!forestry!(the!UK!Woodland!Carbon!Code)!and!experience!developing!regional!markets!for!peatland!restoration!in!Germany!(the!MoorFutures!scheme,!Box!1).!

This!Final!Report!describes!how!a!regional!carbon!market!(see!glossary!for!definition)!for!peatland!restoration!is!being!developed!for!the!UK.!Section!2!considers!the!extent!and!condition!of!peatlands!internationally!and!in!the!UK,!their!climate!change!mitigation!potential!and!how!changes!in!GHG!emissions!after!restoration!may!be!measured.!It!considers!the!costWeffectiveness!of!peatland!restoration!and!summarises!market!research!on!business!interest!in!investing!in!these!sorts!of!projects!(see!Appendix!3!for!the!market!research!report).!Section!3!then!considers!the!international!policy!and!carbon!market!context,!and!describes!how!markets!for!peatland!restoration!have!been!developed!in!NE!Germany.!Finally!in!Section!4,!the!paper!describes!the!development!of!a!UK!Peatland!Code,!designed!to!help!fund!peatland!restoration!by!providing!guidance!to!restoration!projects!whilst!providing!sponsors!with!quantification!and!official!IUCN!recognition!of!the!climate!and!other!benefits!arising!from!the!projects!they!fund.!!

!(

( (

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2.(The(role(of(peatland(restoration(in(climate(regulation(

!The!carbon!budget!of!peatland!ecosystems!and!resulting!GHG!emissions!and!removals!is!largely!controlled!by!the!degree!of!water!saturation,!as!well!as!climate!and!nutrient!availability!(IPCC!2006).!In!their!natural!state,!waterWlogged!conditions!encountered!in!peatlands!lead!to!anoxic!(oxygenWpoor)!soil!conditions!which!significantly!slow!decomposition!of!dead!plant!material,!resulting!in!the!accumulation!of!peat!(Clymo!1984).!In!this!way,!peatlands!have!withdrawn!vast!amounts!of!carbon!from!the!atmosphere!over!the!past!millennia,!making!them!the!most!efficient!terrestrial!carbon!store!(Joosten(et(al.!2013).!!The!carbon!stored!in!peatlands!is!highly!sensitive!to!disturbance,!however.!In!particular,!lowered!water!tables!can,!by!increasing!the!zone!of!aerobic!decomposition,!quickly!turn!peatlands!into!significant!net!GHG!sources!(e.g.!Couwenberg(et(al.!2011,!Evans!et(al.,!under!review).!!Pathways!of!carbon!losses!from!peatlands!include!gaseous!fluxes!(‘onWsite!emissions’),!and!also!waterborne!fluxes!and/or!biomass!removals!that!can!be!converted!to!gaseous!fluxes!at!a!later!stage!(‘offWsite!emissions’).!Gaseous!fluxes!consist!of!losses!of!carbon!dioxide!(CO2)!through!soil!respiration!under!aerobic!conditions!(peat!decomposition)!and!methane!(CH4)!emissions!through!activity!of!methanogenic!bacteria!under!anaerobic!conditions.!In!the!few!cases!where!nitrous!oxide!fluxes!have!been!measured!they!have!been!found!to!be!negligible!unless!a!peatland!has!been!fertilised!with!nitrogen!or!there!has!been!significant!atmospheric!N!deposition!(Artz!et(al.!2012).!Waterborne!fluxes!consist!primarily!of!export!of!dissolved!organic!carbon!(DOC)!from!drainage!waters!and!erosional!losses!of!particulate!organic!carbon!(POC),!as!well!as!losses!of!dissolved!inorganic!carbon!(DIC),!dissolved!CO2!and!dissolved!CH4!(Worrall!&!Evans!2009;!Billett(et(al.!2010).!

Methane!(CH4)!emissions!from!peatlands!with!high!water!tables!are!strongly!mediated!by!plant!composition.!Aerenchymous!higher!plants,!such!as!the!cotton!grass!Eriophorum!species,!incorporate!a!‘ventilation!system’!within!their!stems!and!roots!to!allow!oxygen!ingress!to!roots!located!below!the!water!table,!which!also!enable!the!transfer!of!CH4!from!the!plant!roots!to!the!surface!(bypassing!CH4Woxidising!bacteria!within!the!aerobic!soil!layer).!On!the!other!hand,!reduced!emissions!have!been!recorded!from!areas!dominated!by!moss,!e.g.!Sphagnum,!which!can!harbour!symbiotic!methaneWoxidisers!(Raghoebarsing(et(al.!2005;!Minkkinen!&!Laine!2006).!When!peatlands!are!restored!to!their!natural!water!levels,!CH4!emissions!typically!rise!again,!and!may!experience!a!transient!potential!‘methane!spike’!as!labile!organic!matter!is!consumed!by!methanogens,!which!may!be!amplified!or!extended!if!rewetted!areas!are!colonized!by!aerenchymous!plants.!Recent!research!indicates!that!increases!in!CH4!following!restoration!through!ditch!blocking!and!associated!pools!may!be!short!lived!if!Sphagnum!or!other!nonWaerenchymous!plants!are!able!to!reWestablish!(Cooper!et(al.,!in!press).!Such!reWvegetation!may!be!facilitated!by!active!restoration!measures!to!encourage!Sphagnum(growth,!or!by!the!creation!of!deeper!pools!in!blocked!ditches!which!favour!Sphagnum(over!Eriophorum(growth!(Peacock!et(al.,!2013).!!!Not!all!restored!peatlands!will!immediately!become!carbon!sinks,!due!to!transiently!high!methane!emissions,!and!lags!in!the!reWestablishment!of!peatWforming!vegetation.!However!compared!to!the!potentially!significant!loss!of!carbon!from!drained!or!eroding!peatlands,!restored!peatlands!generally!either!stabilise!carbon!losses!(i.e.!become!‘carbon!neutral’)!or!ultimately!accumulate!carbon!and!

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provide!a!longWterm!sink!as!atmospheric!carbon!is!laid!down!as!peat!(Baird!et(al.,!2009;!Frolking!et(al.!2006;!Worrall(et(al.!2010;!Bain!et(al.,!2011;!Joosten!2011;!Marsden!and!Ebmeier,!2012).!

!

2.1 Extent)and)condition)of)peatlands)in)the)UK)

The!current!state!of!UK!peatlands!and!organic!soils!has!recently!been!evaluated!by!national!conservation!agencies!(JNCC!2011)!and!by!the!IUCN!UK!Commission!of!Inquiry!on!Peatlands!(Bain(et(al.!2011)!(Table!2).!In!total,!deep!peats!and!organic!soils!cover!around!2.7!M!ha,!or!11%!of!the!total!UK!land!area.!Shallow!peaty!soils!cover!another!4.7!M!ha,!indicating!in!some!cases!where!peatland!habitats!existed!in!the!past!–!in!total!a!third!of!all!UK!soils!(JNCC!2011).!There!are!three!main!types!of!peatland!in!the!UK:!blanket!bogs,!raised!bogs!and!fens,!all!protected!under!international!and!national!wildlife!law.!Blanket!and!raised!bogs!make!up!95%!of!all!remaining!UK!peatlands.!Blanket!bogs!dominate!and!are!associated!with!maritime,!high!rainfall!conditions,!which!are!rare!on!a!global!scale!(Bain(et(al.!2011;!GallegoWSala!&!Colin!Prentice!2012).!The!majority!of!peat!and!peaty!soils!in!the!UK!are!located!in!Scotland!(particularly!NW),!the!Pennines!in!northern!England!and!in!parts!of!Northern!Ireland,!with!localised!concentrations!of!peat!in!East!Anglia!and!SW!England!(Bain!et(al.,!2011).!!

Over!80%!of!UK!peatlands!are!considered!to!be!in!a!degraded!state!(JNCC!2011),!mainly!due!to!drainage,!fire,!grazing!and!afforestation,!as!well!as!atmospheric!pollution!(Holden(et(al.!2007;!Bonn(et(al.!2009a).!Most!UK!peatlands!are!no!longer!peat!forming:!16%!are!severely!eroded,!10%!have!been!afforested,!11%!are!affected!by!past!peat!cutting!and!40%!have!been!modified!or!destroyed!by!conversion!to!agriculture!(Littlewood(et(al.!2010).!The!majority!of!degraded!peatland!is!blanket!bog!with!drainage!for!grazing!as!the!main!driver,!while!drainage!for!cropland!is!more!restricted!to!lowland!peat!soils,!and!forestry!planting!with!associated!drainage!has!occurred!on!around!2000!km2!deep!peat,!mainly!in!Scotland.!Drainage!was!subsidised!with!grants!from!1940sW1980s!in!the!drive!to!promote!provisioning!services,!such!as!food!and!timber!production.!Grant!aid!and!new!drainage!largely!stopped!before!1990!with!policy!reforms!to!safeguard!the!environment!(Robinson,!1990;!Condliffe!2009).!

(

Table(2:!Extent!of!organicWrich!soils!and!peatland!types!in!the!UK!(from!Bain!et(al.!2011,!adapted!with!permission!from!JNCC!(2011))!

!! ((((((Soil(map(data( ((((UK(Biodiversity(Action(Plan(data(

!!Shallow(peaty(or(organoQ

mineral(soil([km2](Deep(peaty(or(

organic(soil([km2](Bogs(([km2](

Fens*(([km2](

England!! 7,386! 6,799! 2,727! 80!Wales! 3,592! 706! 718! 62!Northern!Ireland! 1,417! 2,064! 1,609! 30!Scotland!! 34,612! 17,269! 17,720! 86!Total!area! 47,007! 26,838! 22,775! 258!UK!area!cover! 19.30%! 11.00%! 9.35%! 0.11%!

*!Current!best!estimates!of!fen!habitat,!but!actual!area!may!be!much!larger!(Peter!Jones,!CCW,!pers.!comm.)

!

Within!the!UK,!peatlands!represent!the!single!most!important!terrestrial!carbon!store!with!deep!peat!bogs!containing!over!3,200!±!300!M!t!of!carbon!(Billett(et(al.!2010;!Worrall(et(al.!2011a),!

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approximately!twenty!times!that!of!UK!forests.!This!store!can!only!be!maintained!if!peatlands!remain!wet,!or!are!rewetted.!Damaged!UK!peatlands!are!currently!estimated!to!be!releasing!almost!3.7!M!t!CO2eq!each!year!(Worrall(et(al.!2011a).!This!is!equivalent!to!the!average!emissions!of!around!660,000!UK!households,!and!may!increase!with!ongoing!climate!change!in!the!absence!of!restoration!(Bain!et(al.!2011).!!!

2.2 Mitigation)potential)of)UK)peatland)restoration)!Of!the!2.7!M!ha!deep!peat!soils!in!the!UK,!it!is!estimated!that!1.8!M!ha!are!available!for!restoration!(Bain!et(al.,!2011).!Securing!the!IUCN!UK!Peatland!Programme!target!of!1!million!ha!of!peatland!under!rewetting!and!restoration!management!would!meet!the!UK!Biodiversity!Action!Plan!targets!for!blanket!and!raised!bog!restoration!(845,000!ha)!(Bonn!et(al.,!under!review).!!!Depending!on!the!initial!condition!and!form!of!peatland!restoration!high!GHG!emission!reductions!can!be!achieved!(Artz(et(al.!2012).!Especially!on!bare!peat!sites,!restoration!may!provide!very!high!GHG!emission!reductions!within!2W4!years,!when!reWvegetation!rapidly!limits!erosion!losses!(POC)!and!reWinstates!primary!productivity!and!CO2!uptake!(Waddington(et(al.!2010;!Worrall(et(al.!2011b).!However!nearWnatural!conditions,!and!the!subsequent!reWinitiation!of!peat!formation,!may!take!decades!to!establish!on!these!heavily!modified!sites.!Restoration!on!moderately!damaged!peatlands!with!grip!blocking!may!lead!to!less!dramatic!reductions!in!carbon!losses!through!reduced!decomposition!rates,!but!stable!peat!forming!conditions!may!reWestablish!more!quickly!(Komulainen(et(al.!1999;!Artz(et(al.!2012).!As!noted!above,!CH4!emissions!may!peak!in!the!years!immediately!following!restoration,!but!this!effect!can!be!minimised!by!effective!restoration!techniques,!such!as!encouraging!Sphagnum!growth!and!limiting!flooding.!Figure!1!illustrates!the!carbon!gains!over!time!with!emission!reductions!from!a!drained!bog!after!grip!blocking!within!the!first!10!years!of!2.5t!CO2!

eq!haW1!yrW1!and!further!emission!savings,!when!carbon!fluxes!are!reWinstated!to!near!natural!conditions!at!3.1t!CO2eq!haW1!yrW1.!!!UK!peatland!restoration!therefore!could!provide!an!abatement!potential!of!2.5!M!t!CO2eq!per!year!if!the!goal!of!1M!ha!restoration!could!be!realised,!using!the!conservative!estimate!of!2.5!t!CO2eq!haW1!yrW1!emission!reductions!through!restoration.!This!would!equate!to!the!one!year’s!worth!of!GHG!reductions!(1%!annual!reductions),!which!need!to!be!made!from!now!to!reach!the!UK!climate!change!target!for!2027!(Bonn!et(al.,!under!review).!!

!

! 16!

!!!

Figure(1:!Indicative!Global!Warming!Potential!(GWP)!of!UK!blanket!bogs!under!natural,!drained!and!rewetted!state.!ReWwetting!results!in!at!least!2.5!t!CO2e!savings!per!ha!per!year.!Figures!are!illustrative,!using!conservative!estimates;!based!on!Silvola!et(al.!1996;!Byrne!et(al.!2004;!Wallage!et(al.(2006;!Holden!et(al.!2007;!Minkkinen!et(al.!2007;!MacNamara!et(al.!2008;!Billett!et(al.!2010;!Worrall!et(al.!2010b;!Couwenberg!et(al.!2011;!Worrall!et(al.!2011,!cited!in!Bain!et(al.!2011!(figure!reproduced!with!permission!from!Bain!et(al.,!2011).!

!

It!should!be!noted!that!peatlands!are!vulnerable!to!climate!change.!With!rising!temperatures,!areas!of!peatland!in!England!and!Wales!and!the!south!of!Scotland!will!become!less!suitable!for!peat!formation!(GallegoWSala!2010).!Increased!temperatures!could!dry!out!peat!soils,!and!reduce!water!tables,!leading!to!the!oxidization!of!the!peat!into!carbon!dioxide!and!putting!peat!soils!at!greater!risk!from!wildfire,!while!more!heavy!rainfall!events!could!increase!erosion!on!already!damaged!peatlands!(Marsden!and!Ebmeier,!2012).!Having!said!this,!it!is!difficult!to!predict!specific!changes!in!particular!peatlands,!given!the!scales!at!which!most!climate!models!operate,!and!the!challenges!of!downscaling!these!models!(Marsden!and!Ebmeier,!2012).!These!effects!are!anticipated!to!be!greatest!in!peatlands!that!have!already!been!degraded,!and!it!is!expected!that!pristine!(and!restored)!bogs!are!likely!to!be!more!resilient!to!changes!in!temperature!(Clark!et(al.!2010).!!

!

)

)

2.3)Measuring)changes)in)peatland)GHG)emissions)after)restoration)

The!Intergovernmental!Panel!on!Climate!Change!(IPCC)!is!currently!preparing!additional!guidance!on!how!to!assess!and!report!on!emissions!from!organic!soils!and!wetlands,!including!the!rewetting!of!peatland.!This!will!involve!providing!default!GHG!emission!figures!associated!with!changing!water!levels,!and!other!activities!on!peatland.!This!supplementary!guidance!is!expected!to!be!available!in!October!2013!(IPCC!2011),!and!should!form!the!basis!for!any!future!peatland!GHG!accounting!under!the!UNFCCC!and!its!Kyoto!Protocol!in!the!UK!(assuming!it!decides!to!include!it!in!the!GHG!inventory)!and!elsewhere.!!

!

! 17!

To!quantify!emission!reductions,!data!on!GHG!emissions!with!and!without!peatland!restoration!are!needed.!The!IPCC!provides!three!tiers!of!methods!for!measuring!GHG!emissions:!‘tier!1’!methods!are!simple!methods!based!on!default!values!for!different!land!uses!etc.;!‘tier!2’!methods!are!similar,!but!include!countryWspecific!emissions!factors!and!other!data;!and!‘tier!3’!methods!are!more!complex,!often!modelWbased!approaches.!The!IPCC!Guidelines!provide!typical!default!‘Tier!1’!emissions!factors!from!organic!soils!for!different!land!use!categories,!such!as!forest!land,!cropland!and!grassland!(IPCC!2006).!These!Tier!1!emission!factors!could!in!theory!be!used!for!carbon!payment!schemes!for!peatland!restoration.!However,!Tier!1!emission!factors!are!designed!to!be!applicable!across!global!peatlands!based!on!limited!climate,!soil!and!landWuse!data,!and!thus!provide!limited!scope!to!reflect!the!specific!conditions!within!individual!countries.!For!example,!temperate!and!boreal!peats!are!differentiated!only!at!the!level!of!‘nutrient!rich’!(fen)!and!‘nutrient!poor’!(bog),!without!specific!consideration!of!the!(different)!functioning!of!blanket!bogs!which!predominate!within!the!UK.!Managed!organic!soils!are!assumed!to!be!drained,!whereas!some!modified!UK!blanket!bogs!may!not!be!(e.g.!those!under!burn!management!for!game,!or!eroded!by!wildfire,!overgrazing!and/or!air!pollution).!Therefore!it!is!likely!that!to!achieve!reliable!emission!reduction!estimates!over!time!at!the!national!level,!UK!peatland!carbon!markets!would!need!to!apply!a!Tier!2!approach!(using!countryWspecific!emission!factors!and!peat!and!land!use!types),!or!a!Tier!3!approach!(using!more!detailed,!dynamic!accounting!methods!or!modelled!data).!!

While!methods!and!demonstration!sites!for!monitoring!complete!carbon!budgets!(including!sinks!and!sources!from!all!fluvial!and!gaseous!pathways)!from!UK!peatlands!are!available!(Billett(et(al.!2010),!measuring!emissions!from!individual!peatland!sites!can!be!challenging!and!expensive.!Although!Tier!3!processedWbased!models!are!less!expensive!than!empirical!measurements!of!GHG!emissions!savings,!they!still!require!empirical!meaurements!to!calibrate!models!to!new!sites,!and!to!validate!model!outputs.!!There!is!therefore!a!need!for!more!costWeffective!proxy!variables!for!assessing!carbon!fluxes!are!needed!(a!type!of!Tier!2!approach).!Most!GHG!emissions!from!peatlands!are!closely!correlated!with!the!water!table,!either!directly!or!indirectly!via!the!effects!of!water!table!levels!(in!semiWnatural!ecosystems)!on!species!assemblage.!These!functional!relationships!have!underpinned!the!development!of!the!Greenhouse(gas(Estimation(Site(Types!(GEST)!approach!for!continental!Europe,!which!provides!proxy!measures!for!GHG!emission!from!peatlands!(Couwenberg(et(al.!2011).!Couwenberg!and!coWauthors!developed!a!matrix!system!that!classifies!vegetation!assemblages,!according!to!their!relationship!with!water!table!levels!and!the!presence!of!aerenchymous!species,!whilst!also!considering!nutrient!status,!pH!and!land!use!into!GESTs.!The!GEST!approach!allows!for!a!rapid!baseline!assessment!of!GHG!fluxes!from!peatland!sites!in!their!current!state!and!offers!more!detailed!assessments!than!current!IPCC!default!values!(Couwenberg!2011).!A!carbon!accounting!methodology!for!peatland!rewetting!projects!based!on!the!GEST!approach!has!been!recently!developed!(O'Sullivan!&!Emmer!2011)!and!approved!by!the!Verified!Carbon!Standard!(www.vWcWs.org)!to!enable!peatlands!to!be!restored!via!international!voluntary!carbon!markets.!A!similar,!parallel!development!in!the!UK,!focusing!directly!on!ecosystem!function!and!GHG!flux!pathways!(and!less!on!water!table!levels,!which!are!less!useful!as!a!proxy!for!rainWfed!blanket!bogs),!has!led!to!the!development!of!Standard!Emissions!Values!for!different!blanket!bog!states!(Birnie!and!Smyth,!2013).!!!

!

!

! 18!

!)

) )

!

! 19!

3.(Policy(and(Market(Background(

)

3.1)International)climate)change)policy)and)peatlands)

The!United!Nations!Framework!Convention!on!Climate!Change!(UNFCCC)!is!the!international!process!that!provides!a!regulatory!framework!for!action!to!reduce!GHG!emissions.!Under!this!treaty,!the!Kyoto!Protocol!sets!mandatory!emission!limits!and!reduction!targets!for!developed!nations,!including!the!UK,!for!the!first!commitment!period!2008W2012!and!the!second!commitment!period!which!runs!from!1!January!2013!to!31!December!2020,!and!defines!which!activities!have!to!be!accounted!for!as!emission!or!removal.!For!the!first!commitment!period,!the!Kyoto!Protocol!and!relevant!delegated!legislation!prescribed!that!countries!must!account!for!emissions!and!removals!from!afforestation,!reforestation!and!deforestation!(in!line!with!Article!3.3)!and!allowed!for!accounting!for!forest!management,!cropland!management,!grazing!land!management!and!reWvegetation!on!a!voluntary!basis!(in!line!with!Article!3.4).!At!COP17,!parties!to!the!convention!agreed!to!recognize!Wetland(Drainage(and(Rewetting!(WDR)!as!a!specific!new!activity!under!Article!3.4!of!the!Kyoto!Protocol,!which!may!be!accounted!for!on!a!voluntary!basis!during!the!second!commitment!period.!This!is!an!important!decision,!giving!further!legitimacy!to!peatland!restoration!as!a!climate!mitigation!activity.!As!a!voluntary!activity,!it!is!for!individual!Governments!to!decide!whether!to!incorporate!this!activity!from!2013!onwards!in!their!international!GHG!accounting.!Emission!reductions!from!any!restoration!carried!out!since!1990!may!be!accounted!for.!In!return,!any!new!drainage!undertaken!since!1990!will!also!have!to!be!taken!into!account.!In!the!UK!most!drainage!of!peatlands!took!place!prior!to!the!mid!1980s!and!subsequently!declined!as!a!result!of!changes!in!forestry!and!agriculture!policy!in!support!of!peatlands!(Robinson,!1990;!Condliffe!2009).!Therefore,!the!main!impact!of!adopting!the!new!category!for!the!UK!(or!if!the!UK!were!to!account!for!grazing!land!management,!given!that!most!peatlands!could!be!classified!as!grasslands)!would!be!to!allow!peatland!restoration!projects!to!contribute!to!meeting!the!country’s!climate!change!targets!(Bonn!et(al.,!under!review).!!

)

3.2)The)market)for)peatland)restoration)

3.2.1!Types!of!market!As!evidence!of!the!impacts!of!peatland!degradation!have!become!clearer,!interest!has!grown!in!the!potential!to!stimulate!private!investment!for!peatland!restoration!through!carbon!markets!(Worrall(et(al.!2009).!There!are!several!potential!options!for!funding!peatland!restoration!outlined!in!Figure!2.!Broadly!speaking,!they!differ!in!the!extent!to!which:!i)!they!pay!solely!for!carbon!and!climate!mitigation!benefits,!or!pay!for!a!wider!range!of!ecosystem!services!derived!from!restoration;!ii)!they!are!publically!versus!privately!funded;!and!iii)!they!are!international!or!regional!in!scope!(Bonn!et(al.,!under!review).!The!compliance!carbon!market!(established!via!the!Kyoto!Protocol)!is!an!example!of!an!international,!partWpublic!funded!and!partWprivate!funded!mechanism,!primarily!for!climate!mitigation,!though!coWbenefits!are!included!(particularly!in!Clean!Development!Mechanisms!projects).!International!voluntary!carbon!markets!and!regional!carbon!markets!(such!as!MoorFutures)!are!examples!of!private!funding!of!primarily!climate!mitigation!benefits,!but!generally!with!a!greater!emphasis!on!coWbenefits!than!the!compliance!market.!Regional!carbon!markets!may!be!national!or!regional!in!scope,!and!typically!target!primarily!national!or!regional!investors!to!contribute!towards!local!restoration!schemes!(although!they!do!not!necessarily!preclude!

!

! 20!

!

!

Figure'2:!Options!for!public!and!private!financing!of!peatland!restoration!and!rewetting!in!the!UK!(VCUs!=!Verified!Carbon!Units;!CAP!=!Common!Agricultural!Policy,!CERs!=!

Certified!Emission!Reduions;!REDD+!H!Reducing!Emissions!from!Deforestation!and!Forest!Degradation;!EU!ETS!=!European!Union!Emission!Trading!Scheme;!VCS!=!Verified!

Carbon!Standard)!(from!Bonn!et#al.,!under!review)! !

!

! 21!

international!investment).!Although!they!develop!their!own!regional!standards,!they!may!

draw!on!and!adapt!existing!standards!from!the!international!voluntary!carbon!market.!

Finally,!agri@environment!schemes!across!Europe!are!national!schemes!channelling!public!

funding!from!the!EU!into!peatland!restoration.!They!are!justified!on!the!basis!of!paying!for!

the!fullest!possible!range!of!ecosystem!service!benefits.!

!

Formal!‘compliance’!carbon!markets!under!the!Kyoto!Protocol!based!on!its!flexibility!

mechanisms!(Emissions!Trading,!Joint!Implementation,!and!Clean!Development!Mechanism)!

currently!do!not!apply!to!land!use!projects!in!the!UK.!Changes!would!be!necessary!to:!i)!UK!

legislation!to!allow!projects!to!become!part!of!the!Joint!Implementation!scheme!under!the!

UNFCCC!and!ii)!the!EU’s!Emissions!Trading!Scheme!to!allow!companies!to!use!credits!from!

land!use!activities!to!meet!compliance!requirements!(Bonn!et!al.,!under!review).!This!is!

therefore!not!a!viable!option!for!UK!peatland!carbon!schemes!in!the!short!term.!!

!

The!global!voluntary!carbon!market!was!valued!at!$569!million!in!2011,!which!is!significantly!

smaller!in!value!compared!to!the!compliance!market!with!a!value!of!$149!billion!in!2011!

(Kossoy!&!Guigon!2012).!Currently,!however,!in!practical!terms,!the!voluntary!market!is!the!

only!market!that!can!provide!direct!finance!to!peatland!projects!(Joosten!et!al.!2012).!!

Peatlands!are!already!eligible!under!existing!standards!for!the!voluntary!market,!i.e.!the!

Verified!Carbon!Standard!(VCS!http://www.v@c@s.org/)!and!the!Climate!Community!and!

Biodiversity!Standard!(CCBS!http://www.climate@standards.org/).!The!VCS!is!most!commonly!

used!to!provide!general!standards!for!land@based!climate!change!mitigation!projects,!and!

can!now!be!used!also!to!verify!changes!in!carbon!stocks!resulting!from!peatland!restoration!

projects.!In!2012,!the!VCS!programme!approved!a!new!set!of!Wetland!Restoration!and!

Conservation!(WRC)!requirements!fully!in@line!with!all!other!Agriculture,!Forestry!and!Other!

Land!Use!(AFOLU)!activities.!A!new!AFOLU!category!–!the!Rewetting!of!Drained!Peatlands!

(RDP),!as!sub@category!of!Restoration!of!Wetland!Ecosystems!(RWE)!–!is!now!part!of!the!

standard.!Accreditation!via!the!VCS,!however,!can!be!very!costly!(due!to!the!need!for!

independent!verification!by!two!qualified!parties)!and!is!typically!only!feasible!financially!for!

large@scale!projects!or!big!investors.!!

For!this!reason,!regional!carbon!markets!are!emerging,!with!their!own!standards!(often!

based!on!VCS!guidance),!which!are!sufficiently!rigorous!for!investors,!but!that!are!more!cost@

effective!to!implement!than!VCS!standards.!Such!regional!schemes!also!have!the!advantage!

of!being!tailored!to!the!specific!regional!context,!which!may!enable!them!to!offer!more!

rigorous!standards.!For!example,!regional!schemes!are!more!likely!to!be!able!to!verify!GHG!

emission!reductions!on!the!basis!of!empirical!or!modelled!measurements!rather!than!using!

IPCC!default!values,!and!may!be!able!to!better!identify!potential!trade@offs!with!other!

ecosystem!services!provided!by!the!project!area!(see!Box!1!for!an!example!from!Germany).!!

There!is!growing!interest!in!extending!this!approach!to!develop!a!regional!market!for!

peatland!restoration!in!the!UK.!The!UK!Government!is!supporting!companies!and!

businesses,!who!wish!to!register!their!own!corporate!GHG!emissions,!and!such!reporting!is!

mandatory!for!large!companies.!At!present,!peatland!restoration!is!not!yet!included!in!the!

Governments!guidance!on!corporate!GHG!reporting!(the!Defra/DECC!Greenhouse!Gas!

Accounting!Guidelines).!However,!it!may!be!possible!to!add!an!annex!that!would!allow!

!

! 22!

companies!to!invest!in!peatland!restoration!as!part!of!their!efforts!to!become!carbon!neutral!

under!these!guidelines!in!future.!This!may!occur!in!the!short@term!(e.g.!2@5!years!from!now)!

compared!to!the!much!longer@term!prospect!of!trading!on!voluntary!carbon!markets!(more!

likely!at!least!10@20!years!from!now,!based!on!Government!and!independent!projections!of!

likely!future!carbon!prices).!!

!

Box!1:!MoorFutures!Standard!

The!MoorFutures!standard,!for!example,!was!launched!in!2011!to!support!restoration!in!a!

particular!region!of!Germany,!the!federal!state!of!Mecklenburg@Vorpommern!(MLUV!2009).!

The!MoorFutures!Standard!has!been!developed!based!on!the!Verified!Carbon!Standard!

(VCS)!Wetland!Restoration!and!Conservation!(WRC)!guidance!(see!above).!While!applying!

the!VCS!methodology!would!be!too!expensive!in!Mecklenburg@Vorpommern,!as!sites!are!

relatively!small,!the!Moorfuture!Standard!has!been!developed!to!suit!specific!regional!

conditions!and!is!therefore!more!cost!efficient!to!implement.!Additionality!of!MoorFutures!is!

secured!as!restoration!projects!can!only!be!realised!through!the!finance!generated!through!

the!MoorFuture!credits.!To!allow!for!transparency!and!to!avoid!double!counting!Moorfuture!

credits!are!retired!(see!glossary)!and!recorded!in!a!federal!state!registry!with!a!specific!series!

number.!Using!the!series!number!investors!and!their!customers!can!easily!establish!how!

many!emission!reductions!have!been!retired,!and!this!state!registry!can!also!be!incorporated!

in!business!communication!strategies.!Moorfuture!credits!are!based!on!realistic!estimates!of!

emissions!before!and!after!rewetting!using!the!GEST!approach!(see!section!2.3).!Measuring!!

gas!fluxes!at!demonstration!sites!for!these!site!types!ensures!that!emission!data!are!open!to!

scrutiny!and!verifiable.!To!estimate!emission!reductions,!the!MoorFutures!use!a!forward!

looking!baseline!(see!glossary!for!definition),!i.e.!the!results!of!a!‘with!project’!scenario!are!

compared!with!the!reference!scenario!that!would!have!occurred!without!implementation!of!

the!project.!Reductions!in!N2O!emissions!with!rewetting!are!not!included,!and!potential!

depletion!of!peat!in!the!baseline!is!taken!into!account,!i.e.!emission!reductions!for!areas!

with!thin!peat!layers!are!only!calculated!as!long!as!they!would!not!have!been!exhausted!by!

continued!decomposition!without!rewetting.!MoorFutures!ensures!permanence!of!GHG!

emission!removals!through!requirements!for!project!design,!longevity!of!legal!constructions!

and!the!assessment!of!non@permanence!risk!factors.!In!such!a!manner,!the!permanence!of!

MoorFutures!is!guaranteed!through!a)!prescribed!water!levels!under!the!Water!Law!,!b)!

entries!in!the!land!register!to!secure!permanence!of!the!required!water!levels!and/or!c)!the!

purchase!of!land!for!restoration!through!the!‘Stiftung!Umwelt@!und!Naturschutz!

Mecklenburg@Vorpommern’!trust!that!can!guarantee!the!long@term!maintenance!of!project!

sites.!

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! 23!

3.2.2!Market!research!

To!investigate!demand!from!business!for!peatland!restoration!in!the!UK,!Appendix!3!

presents!the!results!of!interviewing!representatives!from!a!sample!of!15!businesses!across!a!

broad!range!of!sectors!that!were!either!currently!investing!in!land@based!carbon!projects,!or!

had!the!potential!to!do!so!(there!was!a!focus!on!the!corporate!sector,!but!three!interviews!

were!conducted!with!small!to!medium!enterprises!(SMEs)).!Broadly!speaking,!there!were!

two!types!of!investors:!i)!multi@nationals!with!UK!brand!identity,!and!a!substantial!UK!

customer!and/or!employee!base!in!relatively!close!proximity!to!peatland!restoration!sites!

who!wish!to!build!brand!awareness!and!loyalty;!and!ii)!SMEs!with!brand!or!product!lines!

linked!to!peatlands!e.g.!food!and!drink,!hospitality/tourism.!Many!multi@nationals!were!

interested!in!the!possibility!of!using!peatland!carbon!for!future!carbon!trading!and!corporate!

carbon!accounting.!However,!for!corporations!with!large!emissions,!the!co@benefits!of!

peatland!restoration!were!more!important!than!the!climate!benefits!per!se,!as!these!would!

only!ever!represent!a!very!small!fraction!of!their!overall!emissions!profile.!Similarly,!SMEs!

were!more!interested!in!the!full!range!of!benefits!arising!from!peatland!restoration!that!they!

could!use!to!help!market!specific!products,!rather!than!being!narrowly!focussed!on!the!

climate!benefits.!Having!said!this,!all!respondents!were!particularly!interested!in!the!carbon!

benefits,!and!wanted!rigorous!quantification!of!these!benefits.!This!was!followed!by!

interests!in!biodiversity,!followed!by!water!quality!benefits!(especially!for!companies!with!

large!water!usage).!However,!given!the!likely!additional!costs!of!quantifying!these!co@

benefits,!respondents!were!content!for!them!to!be!vouched!for!by!an!expert!panel!or!a!well@

known!NGO!who!they!would!trust!to!deliver!such!benefits.!!

!

Sectors!with!particular!interest!in!financing!peatland!restoration!included:!!

• food!&!drink!(marketing!brands!and!product!lines!linked!to!peat/uplands!e.g.!fell!

bred!lamb,!spring!water!products,!whisky!etc.);!!

• hospitality/tourism!linked!primarily!to!upland!peats;!!

• energy!(compensating!damage!from!infrastructure!development);!!

• water!(capturing!the!carbon!benefits!of!restoration!being!undertaken!for!water!

quality!benefits);!and!!

• horticulture!(in!particular!enhancing!peat@free!compost!brands).!!

Respondents!were!generally!prepared!to!pay!a!premium!for!UK!projects!that!could!provide!

multiple@benefits!in!addition!to!climate!change!mitigation.!There!was!no!desire!to!see!a!fixed!

price!for!carbon!in!peatland!restoration!projects;!rather!respondents!expected!pricing!to!

reflect!the!location!and!range!of!co@benefits!that!they!could!link!to!different!product!lines.!!

!!

! !

!

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4.!UK!Peatland!Code!Development!

A!draft!UK!Peatland!Code!was!published!in!June!2013!via!the!IUCN’s!UK!Peatland!

Programme!website.!Public!feedback!was!sought!online!and!via!a!workshop!in!London.!A!

Steering!Group!for!the!Code!was!constituted!and!met!for!the!first!time!in!August!2013,!with!

representatives!from!each!of!the!UK’s!Devolved!Administrations,!Defra,!NGOs!and!the!

business!community.!A!pilot!phase!Peatland!Code!was!launched!in!September!2013.!The!

remainder!of!this!section!provides!an!overview!of!the!UK!Peatland!Code,!describing!its!key!

goals!and!the!mechanisms!that!have!been!designed!to!meet!these!goals.!Then,!drawing!on!

the!Code,!it!provides!a!more!detailed!description!of!how!a!number!of!key!issues!have!been!

dealt!with!in!the!Code,!including!additionality,!permanence,!monitoring!and!accounting!for!

the!co@benefits!of!restoration.!The!full!UK!Peatland!Code!can!be!found!in!Appendix!1,!and!

responses!to!public!feedback!on!the!draft!Code!can!be!found!in!Appendix!2.!The!Code!is!also!

available!online!at:!http://www.iucn@uk@peatlandprogramme.org/peatland@code.!

!

4.1$Overview$

The!UK!Peatland!Code!is!designed!to!provide!an!open,!credible!and!verifiable!basis!for!

business!sponsorship!of!specific!pilot!projects!undertaking!UK!peatland!restoration.!The!

Code!assures!that!restoration!delivers!tangible!climate!change!mitigation!benefits,!alongside!

other!environmental!benefits.!At!this!stage!the!pilot!phase!Code!is!designed!to!facilitate!

business!sponsorship2!motivated!by!corporate!social!responsibility;!it!is!not!currently!

intended!for!use!in!formal!offset3!schemes,!corporate!carbon!reporting!or!to!be!traded!on!

international!carbon!markets.!The!Code!does!provide!guidance!on!quantifying!climate!and!

other!benefits,!to!reinforce!the!value!of!the!sponsoring!restoration,!and!it!may!be!possible!

to!count!these!benefits!in!corporate!carbon!accounts!in!future!if!Government!guidelines!

allow.!It!may!also!be!possible!to!trade!this!carbon!on!carbon!markets!in!future!via!additional!

verification!to!accepted!international!standards.!However,!these!options!are!not!included!in!

the!pilot!phase!of!the!Code.!!

The!aim!of!the!pilot!phase!is!to!encourage!early!sponsorship!of!peatland!restoration!to!help!demonstrate!peatland!benefits!and!build!an!increasingly!robust!evidence!base!and!

methodology!for!future!phases!of!Code!development.!Lasting!18!months,!the!pilot!phase!

will!focus!on!further!developing!the!infrastructure!for!the!Code,!including:!!

• testing!and!refining!proxy!models!for!carbon!monitoring!and!developing!a!

standardised!field!protocol!for!vegetation!monitoring;!!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!2 Sponsorship in the context of this Code refers to payments that are made in return for the provision of ecosystem services, principally climate change mitigation, which is quantified, with likely co-benefits for biodiversity and water quality captured in an environmental statement, based on relevant evidence. During Phase 1 of the Code, there is no option to trade carbon credits to obtain a financial return on investment. However, it is expected that sponsors will be using the ecosystem services they sponsor to balance against their own business activities in some form, for example incentivising sales of a certain product by using a portion of the sale price to restore peatlands. Sponsors will need to be clear therefore that the ecosystem services, once used in this way, cannot be banked for future re-sale, and it may not be possible to re-use them in any subsequent carbon trading regime 3 Schemes that generate tradable carbon credits that can be used to offset the emissions of sponsors

!

! 25!

• developing!evidence@based!financial!analysis!of!the!various!life@cycle!costs!

associated!with!investing!in!peatland!restoration;!and!!

• work!with!the!UK!Accreditation!Service!and!existing!third@party!UKAS@accredited!

auditors!to!develop!protocols!to!assess!and!accredit!auditors!and!projects!under!the!

Peatland!Code.!!

The!goal!is!to!eventually!develop!a!registry!for!Peatland!Code!projects!to!issue!and!record!

ownership!and!transfers!of!GHG!emission!reduction!credits!and!their!subsequent!

retirement,!cancellation!or!suspension!under!different!circumstances.!!

The!pilot!phase!of!the!Peatland!Code!is!focusing!on!businesses!who!wish!to!undertake!

corporate!social!responsibility!(CSR)!activities!that!have!tangible!outcomes.!Climate!benefits!

cannot!be!used!in!formal!corporate!carbon!reporting!or!be!traded!on!international!carbon!

markets,!although!the!potential!exists!for!these!activities!to!be!incorporated!in!the!future.!

Sponsorship!is!sought!from!businesses!to!cover!the!full!costs!of!restoration,!including!

ongoing!costs!for!land!managers!to!maintain!sites!in!good!condition.!Costs!will!vary!from!site!

to!site,!for!example!depending!on!the!type!of!peatland,!level!of!damage!or!accessibility,!

providing!sponsors!with!a!range!of!opportunities!in!different!locations!with!different!levels!

and!types!of!benefits!to!suit!their!branding!and!CSR!needs.!

The!Peatland!Code!sets!out!principles,!requirements!and!guidance!for!the!eligibility!of!

projects,!how!projects!are!governed!and!documented,!and!how!the!climate!and!other!

benefits!of!restoration!should!be!monitored:!!

• Projects!must!be!eligible!in!terms!of!timing,!type!of!activity!undertaken,!land!

ownership!and!tenure!rights,!compliance!with!relevant!legislation,!and!

demonstrate!that!they!would!not!have!otherwise!occurred!without!finance!via!

the!Code;!

• Projects!need!an!effective!and!transparent!governance!structure!with!clear!lines!of!accountability!to!enable!cost@effective!verification,!and!to!build!

confidence!with!stakeholders.!This!will!ensure!that!carbon!benefits!are!not!

double@counted,!risks!are!adequately!managed!to!sustain!the!carbon!stored!by!

the!restored!peatland,!and!relevant!stakeholders!are!consulted!about!proposed!

projects;!

• Projects!need!to!be!clearly!documented.!Effective!reporting!will!thus!ensure!

that!all!aspects!of!project!design!are!laid!out,!there!are!effective!management!

plans!to!deliver!projects,!and!claims!about!carbon!are!clear,!conservative!and!

accurate;!and!

• Projects!need!to!make!provision!for!effective!monitoring,!capable!of!providing!

up@to@date!information!on!the!project’s!progress!towards!climate!mitigation!

goals.!Projects!need!to!be!of!high!environmental!quality,!taking!into!account!the!

wider!impacts!on!ecosystems!to!ensure!that!no!harm!is!done!by!the!project!and,!

whenever!possible,!that!wider!benefits!are!created.!

!

!

!

!

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4.2!Approach!to!additionality!

The!Code!sets!out!a!number!of!criteria!that!need!to!be!met!in!order!for!a!project!to!

demonstrate!its!‘additionality’!i.e.!that!without!sponsorship,!the!peatland!restoration!project!

would!not!otherwise!have!occurred!without!sponsorship:!

• Legal!Test:!the!project!would!not!be!considered!additional!if!there!is!a!pre@existing!legal!order!specifying!that!peatland!should!be!restored!(e.g.!planning!conditions).!Restoration!is!considered!additional!on!sites!with!conservation!designations!(e.g.!Sites!of!Special!Scientific!Interest!and!Natura!2000!sites),!where!there!are!objectives!to!restore!peatland,!but!where!sufficient!finance!has!hitherto!been!unavailable!to!achieve!these!objectives!(whether!privately!or!via!agri@environment!schemes),!and!where!there!are!no!statutory!orders!requiring!action!e.g.!nature!conservation!orders!under!legislative!Acts;!

• Contribution!of!Carbon!Finance!Test:!an!initial!threshold!for!the!contribution!of!private!sponsorship!towards!the!costs!of!peatland!restoration!has!been!set!at!15%!of!project!costs,!to!allow!future!flexibility.!Projects!receiving!grant!aid!under!a!government@funded!initiative!(e.g.!agri@environment!schemes!such!as!Entry!Level!Stewardship!or!Higher!Level!Stewardship)!are!eligible!provided!at!least!15%!of!the!project!costs!are!from!private!sources!(and!other!additionality!tests!are!met).!Although!agri@environment!funding!can!only!cover!the!costs!of!restoration!and!income!foregone,!it!is!possible!for!private!finance!to!contribute!towards!other!costs!to!make!the!project!viable,!for!example!including!ongoing!maintenance!and!monitoring;!and!

• Barrier!test:!Existing!barriers!to!the!implementation!of!the!project!have!been!overcome.!Barriers!could!be!social,!economic!or!environmental.!Barriers!to!peatland!restoration!may!include:!lack!of!community!buy@in;!inaccessibility;!lack!of!skilled!labour!and!inputs;!and!insufficient!finance!to!meet!up@front!costs.!

!

4.3!Approach!to!permanence!

Permanence!describes!the!issue!of!ensuring!GHG!emission!reductions!are!permanent,!and!

not!reversed!at!a!future!point!in!time.!Peatland!projects!carry!a!risk!of!reversibility!if!

management!interventions!undertaken!as!part!of!a!project!are!reversed!in!future,!and!as!

such!safeguards!must!be!in!place!to!minimise!that!risk,!and!to!guarantee!replacement!or!

compensatory!peatland!restoration!should!a!reversal!occur.!The!Code!proposes!that!risk!

management!is!built!in!at!every!stage!of!project!design,!with!the!size!of!the!risk!buffer!(see!

glossary!for!definition)!being!determined!using!a!risk!assessment.!These!risks!may!include:!!

• Internal!risks!to!the!project,!such!as:!project!management!risks!(e.g.!lack!of!qualified!

personnel!to!undertake!the!restoration!work,!issues!over!enforcing!property!rights,!

and!inappropriate!selection!of!management!techniques);!and!financial!risks!(e.g.!lack!

of!sufficient!funds!to!meet!all!project!costs!or!significant!opportunity!costs);!

• External!risks!to!the!project,!such!as:!land!tenure!and!resource!access,!and!the!threat!that!competing!uses!of!land!can!have!to!the!restoration!project!(e.g.!public!access!may!cause!erosion!and!peatland!degradation);!lack!of!community!‘buy@in’!to!the!project;!and!negative!impacts!on!adjacent!land@holdings;!the!impact!of!changing!land!use!e.g.!tree!planting!or!drainage!on!adjacent!land!within!the!same!hydrological!

!

! 27!

unit;!the!impact!of!fencing!to!exclude!deer,!resulting!in!changed!patterns!of!movement!which!may!affect!a!restoration!site;!and!changes!in!rates!of!atmospheric!deposition!of!pollutants!leading!to!habitat!damage!and!change!in!species!composition!

• Natural!risks!to!the!project,!such!as:!wildfire;!pest!and!disease!outbreaks!among!

peat@forming!plant!species;!extreme!weather;!climate!change;!and!geological!risk!

including!slope@failure,!mass!movements/peat!slides.!

Each!project!is!required!to!undertake!a!risk!assessment!in!line!with!these!criteria.!Projects!

that!are!deemed!at!greater!risk!than!others!are!required!to!put!in!place!a!larger!“GHG!

emission!reduction!buffer”.!For!example,!projects!where!risks!of!drought!and!wildfire!are!

greatest!(due!to!predicted!climate!change!and!visitor!numbers)!are!likely!to!require!larger!

buffers!than!many!more!remote!sites.!The!buffer!is!defined!in!the!Code!as!‘a!pool!of!

unclaimed!GHG!emission!reductions’!to!cover!either!uncertainty!in!GHG!measurement!or!

unavoidable!potential!losses!which!may!occur!from!the!project!over!time,!thus!ensuring!the!

permanence!of!GHG!emission!reductions.!

The!Code!recommends!that!risks!should!be!re@assessed!within!5!years!of!validation!(see!

glossary!for!definition)!and!thereafter!at!10!yearly!intervals!(when!monitoring!is!conducted),!

and!buffer!sizes!adjusted!accordingly.!To!ensure!permanence,!buffers!may!be!shared!

between!different!projects!at!the!discretion!of!the!accrediting!body.!In!this!way,!GHG!

emission!reductions!may!be!taken!from!projects!that!achieve!more!GHG!emission!reductions!

than!they!intended,!whose!buffer!size!is!reduced!at!mid@term!review!or!who!do!not!require!

their!buffer.!These!emission!reductions!may!be!given!to!projects!that!need!to!increase!the!

size!of!their!buffer,!fail!to!realise!intended!GHG!emission!reductions!or!that!lose!GHG!

emission!reductions,!for!example!due!to!catastrophic!events.!

!

4.4!Monitoring!

The!Code!recommends!that!monitoring!and!verification!of!GHG!emission!reductions!(see!

glossary!for!definition)!takes!place!in!the!first!year!following!restoration!(to!demonstrate!

that!the!work!has!been!done),!at!some!point!1@5!years!after!validation,!and!thereafter!at!

periods!of!10!years!(or!less).!Monitoring!is!a!necessary!step!to!assess!how!successful!

restoration!and!management!activities!have!been!in!achieving!objectives,!goals!or!targets.!

For!each!ecosystem!attribute,!a!clearly!defined!set!of!objectives!for!particular!time!periods!

need!to!be!established.!!

Verification!of!the!climate!benefits!of!restoration!should!be!undertaken!by!an!accredited!

body!and!will!assess!the!GHG!balance!of!the!peatlands!after!restoration,!projected!to!the!

end!of!the!contract!period,!compared!to!the!baseline!(reference)!scenario.!The!verification!

will!also!ensure!that!the!peatland!is!being!managed!in!accordance!with!best!practice!

according!to!guidance!that!is!being!prepared!as!part!of!the!pilot!phase.!!

Although!it!is!expected!that!most!projects!will!do!this!through!vegetation!proxies!using!the!

GEST!approach!(see!section!2.3),!projects!may!also!opt!for!(more!expensive,!but!more!

accurate)!direct!empirical!measurements!(following!an!appropriately!designed!sampling!

!

! 28!

strategy,!with!sufficient!sample!density!and!time!intervals,!reporting!at!least!every!10!years,!

to!represent!changes!across!the!site)!using!eddy!covariance!techniques!(via!flux!towers)!or!

closed!chamber!methods.!This!may!be!possible!in!site!that!are!already!instrumented!for!such!

measurements.!

Changes!to!the!reference!condition!should!be!monitored!through!tracking!the!GHG!flux!

measurements!or!tracking!changes!in!the!vegetation!proxies!and!the!condition!of!the!

peatland.!GHG!emissions!from!drained!peat,!litter!and!ground!vegetation!are!estimated!

based!on!the!presence!of!GESTs!with!calibrated!GHG!emission!profiles.!Preliminary!GESTs!for!

UK!peatlands!have!been!published!by!Natural!England/Defra!(Birnie!and!Smyth,!2013).!These!

will!be!further!tested!and!refined!in!pilot!projects!during!the!pilot!phase!of!the!Peatland!

Code,!in!order!to!develop!a!protocol!that!can!be!applied!across!all!UK!peatlands!for!future!

phases!of!the!Code.!!

!

4.5!CoEbenefits!

Peatland!restoration!has!a!range!of!substantial!co@benefits,!including!biodiversity!gains,!

improved!water!quality,!reduced!wildfire!risk,!and!aesthetic!and!accessibility!benefits!for!

recreation.!As!well!as!synergies!with!other!ecosystem!services,!there!are!some!risks!that!

peatland!restoration!may!lead!to!certain!undesirable!trade@offs,!which!may!need!to!be!

minimised!through!proactive!land!management!planning,!either!via!mitigation!measures!or!

additional!payments!to!compensate!for!lost!income!(e.g.!where!restoration!requires!

reducing!the!intensity!of!livestock!grazing).!Basic!peatland!restoration!can!also!provide!a!

foundation!for!other!biodiversity!creation!or!restoration!projects!and,!where!this!land!

management!is!additional!to!the!peatland!restoration!such!management!could!access!other!

income!streams.!

For!this!reason,!the!Code!recommends!that!projects!set!out!the!effects!that!they!anticipate!

on!as!full!a!range!of!ecosystem!services!as!possible!and,!where!appropriate,!include!actions!

to!enhance!the!co@benefits!and/or!minimise!unnecessary!trade@offs.!Experience!from!the!

MoorFutures!scheme!in!Germany,!which!is!attempting!to!monetize!co@benefits,!and!from!

public!feedback!on!the!draft!UK!Peatland!Code,!raised!concerns!about!the!costs!of!

monitoring!co@benefits!in!any!detail.!This!was!supported!by!market!research!(Appendix!3)!

that!showed!likely!sponsors!would!be!happy!with!broad!assurances!based!on!their!trust!in!

the!bodies!delivering!restoration,!and!did!not!require!rigorous!monitoring!of!co@benefits.!

Therefore,!the!Code!encourages!detailed!monitoring!of!co@benefits!wherever!possible,!but!

where!this!is!not!possible,!the!Code!suggests!that!projects!may!create!a!narrative!based!on!

published!evidence!and!include!this!in!their!Environmental!Statement.!This!is!designed!to!

provide!sponsors!with!information!about!the!likely!co@benefits!in!a!particular!site,!on!the!

basis!of!credible!evidence,!but!without!requiring!expensive!ongoing!monitoring.!!

!

!

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!

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5.!Discussion!and!conclusions!

!

Society!values!the!natural!environment!for!climate!regulation,!provision!of!clean!water!and!

recreational/health!benefits,!and!yet!society!does!not!typically!pay!land!managers!to!provide!

many!of!these!benefits,!leading!to!management!for!short!to!medium!term!direct!benefits!

that!sometimes!leads!to!environmental!degradation.!Broadly!speaking!there!are!four!types!

of!policy!instrument!available!to!resolve!this!conflict!of!interests:!information!provision!and!

capacity!building;!regulation;!financial!mechanisms!e.g.!taxes!and!incentives;!and!the!

creation!of!new!markets!to!pay!for!ecosystem!services!(Reed!et!al.,!2011;!Whitfield!et!al.,!

2012).!A!mix!of!most!of!these!instruments!is!already!being!used!in!the!UK.!This!includes!

growing!interest!in!the!creation!of!new!markets!to!facilitate!private!investment!in!the!

provision!of!ecosystem!services.!In!particular,!the!2011!Natural!Environment!White!Paper!

emphasised!the!creation!of!new!markets!to!pay!for!ecosystem!services.!This!led!to!the!

formation!of!an!Ecosystem!Markets!Taskforce,!to!identify!business!opportunities!in!the!

natural!environment!which!recommended!the!development!of!a!peatland!code!in!its!report!

published!in!March!2013.!!In!May!2013,!Defra!published!its!!Payment!for!Ecosystem!Service!

Action!Plan!which!committed!to!supporting!the!development,!testing!and!launch!in!

partnership!with!the!IUCN!of!!a!pilot!UK!Peatland!Code!later!in!2013.!

UK!peatlands!are!a!relevant!place!to!explore!the!potential!to!pay!for!ecosystem!services.!

Peatlands!provide!a!particularly!wide!range!of!ecosystem!services!to!UK!and!global!society!

that!are!not!widely!or!fully!paid!for!via!agricultural!payments!or!by!markets.!Peatlands!are!

the!UK’s!most!significant!carbon!store.!In!addition!to!regulating!the!climate,!peatlands!

provide!many!other!important!services!to!UK!society!including!the!provision!of!drinking!

water,!habitats!for!internationally!important!species!and!recreation.!However!according!to!

the!International!Union!for!Conservation!of!Nature!(IUCN)!UK!Peatland!Programme’s!

Commission!of!Inquiry!on!Peatlands,!around!80%!of!UK!peatlands!are!degraded.!Investing!in!

conserving!and!restoring!them!is!therefore!a!key!tool!to!help!deliver!the!UK’s!climate!change!

obligations,!whilst!helping!meet!other!national!and!international!obligations!on!biodiversity!

and!water!quality.!

The!idea!of!paying!for!ecosystem!services!is!not!without!controversy!however.!Some!have!

argued!that!it!is!morally!wrong!to!put!a!price@tag!on!nature,!and!that!the!Government!is!

seeking!to!privatize!nature!in!an!attempt!to!fix!a!problem!that!was!caused!by!our!capitalist!

system!under@valuing!nature!(Monbiot,!2012).!Others!point!to!social!justice!concerns!

relating!to!the!inequitable!distribution!of!payments!to!primarily!large!landowners!(e.g.!

Wittman!and!Caron,!2009;!McAfee,!2012),!or!highlight!unintended!consequences!of!PES!

schemes!that!paid!for!the!provision!of!certain!ecosystem!services!(e.g.!forestry!and!

agriculture)!at!the!expense!of!others!that!were!harder!to!monetize!and!market!(e.g.!

biodiversity!and!aesthetics)!(e.g.!Kronenberg!and!Hubacek,!2013).,!!

These!issues!are!not!easy!to!tackle.!However!the!research!and!development!of!the!pilot!UK!

Peatland!Code!can!offer!a!number!of!insights!into!the!operationalization!of!new!markets!for!

!

! 30!

ecosystem!services,!which!may!be!of!relevance!to!other!habitats!and!ecosystems!in!the!UK,!

and!to!the!development!of!new!PES!schemes!internationally:!

• PES!schemes!in!practice!do!not!“put!a!price!tag!on!nature”!and!are!not!inconsistent!

with!protecting!nature!for!its!intrinsic!value.!In!the!same!way!that!society!puts!a!

value!on!the!services!people!provide!to!the!economy!and!put!an!economic!value!on!

a!healthy!workforce!without!putting!a!value!on!a!human!life,!there!is!no!

contradiction!in!believing!in!the!intrinsic!value!of!nature,!whilst!valuing!the!services!

it!provides,!in!particular!protection,!restoration!or!enhancement!of!those!services.!

Society!invests!in!public!health!programmes!primarily!because!we!value!human!life,!

but!it!also!makes!economic!sense!to!have!a!healthy!workforce.!In!the!same!way,!it!is!

possible!to!invest!in!nature!conservation!primarily!because!we!intrinsically!value!

non@human!life,!but!as!this!research!has!demonstrated,!there!is!also!a!strong!case!

that!healthy!ecosystems!bring!many!benefits!to!our!economy!and!society,!that!the!

private!sector!is!willing!to!pay!for.!Rather!than!“putting!a!price!on!nature”,!the!Code!

is!intended!to!facilitate!the!discovery!and!expression!of!some!of!the!formerly!

overlooked!benefits!provided!by!nature!from!peatlands,!that!investors!may!now!

ascribe!tangible!value!to,!via!investing!in!restoration!

• Market!research!demonstrates!that!there!is!an!appetite!for!Corporate!Social!

Responsibility!sponsorship!of!peatland!restoration!projects!in!the!UK,!with!companies!prepared!to!pay!a!premium!for!projects!connected!to!their!business!that!could!deliver!multiple!benefits:!

o Broadly!speaking,!two!types!of!potential!investors!emerged!from!this!

analysis:!i)!multi@nationals!with!UK!brand!identity,!and!a!substantial!UK!

customer!and/or!employee!base!in!relatively!close!proximity!to!peatland!

restoration!sites!who!wish!to!build!brand!awareness!&!loyalty.!This!group!

was!more!interested!in!possibility!of!future!trading/accounting,!though!for!

those!with!large!emissions,!the!co@benefits!were!more!important;!and!ii)!

Small!and!Medium@sized!Enterprises!(SMEs)!with!brand!or!product!lines!

linked!to!peatlands!e.g.!food!and!drink,!hospitality/tourism.!This!group!were!

more!interested!in!the!full!range!of!benefits!from!peatland!restoration!to!

help!market!products!

o Sectors!with!particular!interests!in!peatland!restoration!included:!i)!food!&!

drink!(marketing!brands!and!product!lines!linked!to!peat/uplands!e.g.!fell!

bred!lamb,!spring!water!products,!whiskey!etc.);!ii)!hospitality/tourism!

linked!to!uplands;!iii)!energy!(compensating!damage!from!infrastructure!on!

peatlands);!iv)!water!(capturing!the!carbon!benefits!of!work!for!carried!out!

primarily!for!water!quality!benefits);!and!v)!horticulture!(enhancing!peat@

free!brands)!

o Companies!interviewed!for!this!research!were!primarily!interested!in!the!

carbon!benefits!of!peatland!restoration,!and!wanted!rigorous!quantification!

of!this!benefit.!However!they!were!also!interested!in!particular!in!

biodiversity,!followed!by!water!quality!(especially!water!utilities!and!

companies!with!large!water!usage).!Interviewees!were!content!for!these!co@

!

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benefits!to!be!vouched!for!by!an!expert!panel!or!to!be!delivered!via!a!well@

known!NGO!that!they!trust!

o The!companies!interviewed!were!generally!prepared!to!pay!a!premium!for!

UK!projects!that!could!deliver!multiple@benefits.!They!were!content!to!see!

bespoke!pricing!of!projects!to!reflect!the!location!and!range!of!co@benefits!

that!might!link!to!different!product!lines.!The!key!price!differential!was!

between!UK!peatland!restoration!schemes!and!non@UK!multiple!benefit!

schemes!(rather!than!other!UK!land@based!projects)!

• More!broadly,!a!number!of!more!generally!applicable!benefits!or!motivations!for!

business!to!engage!with!PES!schemes!may!be!inferred!from!this!research,!for!example:!

o For!some!business!sectors,!investing!in!PES!schemes!can!help!reduce!costs!

e.g.!water!intensive!industries!or!business!that!require!high!water!quality!

such!as!water!utilities!and!drinks!manufacturers!

o For!some!companies,!PES!may!be!an!opportunity!to!meet!environmental!

obligations!(e.g.!corporate!carbon!accounting)!

o PES!can!demonstrate!corporate!responsibility!towards!the!natural!

environment!(where!this!includes!climate!mitigation!benefits,!it!may!in!

some!cases!be!possible!to!classify!these!investments!as!assets,!given!their!

potential!value!on!carbon!markets,!although!this!is!complicated!by!resource!

ownership!issues)!

o Some!businesses!may!be!able!to!use!PES!schemes!to!market!specific!product!

lines!linked!to!particular!habitats!or!services,!or!at!least!promote!‘cause@

related!marketing’!!

• To!avoid!unintended!consequences!and!provide!investors!with!the!necessary!confidence,!PES!markets!need!appropriate!guidance,!frameworks!and!monitoring.!!

Such!guidance!needs!to!ensure!that:!benefits!are!new!and!would!not!otherwise!have!

occurred!(‘additionality’);!benefits!are!not!lost!or!reversed!in!future;!the!PES!scheme!

does!not!result!in!‘leakage’!wherein!damaging!activities!are!simply!transferred!

elsewhere;!benefits!are!appropriately!monitored!and!quantified;!and!payments!for!

one!ecosystem!service!do!not!lead!to!trade@offs!with!other!ecosystem!services!that!

are!currently!outside!the!market.!Section!4!of!this!report!describes!how!each!of!

these!issues!has!been!tackled!in!the!development!of!the!UK!Peatland!Code!

• It!is!likely!that!codes!of!practice!will!need!to!be!developed!on!a!habitatKbyKhabitat!

basis.!If!there!is!a!proliferation!of!guidance!for!different!habitats!(or!services)!in!future,!there!may!be!a!role!for!Government!to!ensure!standardisation!of!approaches!

and!co@ordinate!between!schemes.!For!example,!it!may!be!possible!to!develop!a!

combined!code!for!land@based!carbon.!The!development!of!the!UK!Peatland!Code!

has!shown!that!there!are!a!number!of!important!differences!between!the!guidance,!

frameworks!and!monitoring!required!for!peatlands!compared!to!woodlands!(or!

indeed!other!habitats).!Although!much!of!the!initial!framework!for!the!Peatland!

Code!was!based!on!previous!experience!developing!the!Woodland!Carbon!Code,!a!

large!number!of!differences!were!required!to!develop!the!mechanisms!required!to!

facilitate!markets!for!peatland!restoration.!Apart!from!obvious!changes!around!the!

!

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definition!of!peatlands!and!eligible!restoration!activities!etc.,!a!number!of!more!

substantial!differences!emerged!between!the!two!Codes,!for!example:!

o Monitoring!requirements!are!particularly!different,!given!the!nature!of!the!

climate!benefits!arising!from!peatland!restoration,!which!are!as!much!about!

reducing!GHG!emissions!from!degraded!bogs!as!they!are!about!sequestering!

carbon!in!restored,!active!bogs.!Rather!than!measuring!changes!in!carbon!

stocks!in!peat!soils,!similar!to!the!approach!in!the!Woodland!Carbon!Code!

where!changes!in!forest!carbon!stocks!are!measured,!the!Peatland!Code!

measures!changes!in!GHG!fluxes,!with!a!view!to!marketing!net!reductions!in!

GHG!emissions!post@restoration!

o Given!the!fact!that!so!many!degraded!peat!bogs!are!located!within!

designated!sites!(e.g.!SSSIs),!the!urgent!need!to!get!these!sites!back!into!

favourable!condition!and!the!lack!of!funding!to!restore!these!sites,!the!

Peatland!Code!considers!the!restoration!of!these!sites!as!effectively!

additional,!although!in!theory!restoration!should!be!occurring!anyway!to!

comply!with!the!requirements!of!the!designation!

o Although!a!potentially!controversial!point,!there!was!widespread!support!for!

this!approach!from!public!feedback.!Given!the!fact!that!most!peatland!

restoration!projects!would!be!unlikely!to!require!an!Environmental!Impact!

Assessment,!the!Peatland!Code!explicitly!requires!project!developers!to!

consult!those!with!tenure!rights!over!the!land!proposed!for!the!project!

(including!those!with!rights!of!access,!and!an!opportunity!for!the!public!to!

provide!views),!in!addition!to!statutory!conservation!and!water!bodies,!and!

make!proposals!to!mitigate!any!negative!impacts!of!the!project!on!these!

rights!holders!

o Finally,!given!the!wide!range!of!additional!benefits!from!peatland!

restoration!(over!and!above!the!climate!benefits)!and!evidence!from!the!

market!research!that!investors!are!interested!in!these!co@benefits,!there!is!

an!additional!section!of!the!Peatland!Code!on!the!description!of!these!

benefits.!Questions!were!asked!about!this!in!the!market!research,!and!there!

was!significant!debate!over!the!benefits!and!challenges!of!quantifying!co@

benefits!at!the!international!expert!workshop!that!was!held!as!part!of!this!

research.!Market!research!suggested!that!although!biodiversity!and!water!

benefits!were!important!to!potential!investors,!there!was!little!appetite!

among!investors!primarily!interested!in!carbon!for!the!accurate!

quantification!of!these!co@benefits,!especially!if!this!increased!costs!

substantially.!Rather,!investors!were!content!to!trust!more!general!

descriptions!and!statements!of!broad!benefits,!for!projects!accredited!under!

the!Code,!especially!if!restoration!was!carried!out!by!well!known!

environmental!charities!that!they!felt!they!could!trust.!The!expert!workshop!

also!identified!a!number!of!challenges!associated!with!monitoring!

biodiversity!and!water!benefits!from!restoration,!with!a!trade@off!between!

costs!and!accuracy.!Monitoring!water!quality!and!quantity!typically!requires!

up@front!investment!in!often!costly!monitoring!equipment,!and!although!the!

capital!costs!associated!with!biodiversity!monitoring!are!lower,!there!are!

!

! 33!

challenges!deciding!which!species!to!monitor!e.g.!flagship!species!that!can!

market!the!scheme,!such!as!birds!of!prey!versus!indicator!species!(which!

may!be!less!attractive!to!investors!and!their!stakeholders)!or!a!more!

comprehensive!survey,!which!would!be!likely!to!indicate!the!gain!of!some!

species!at!the!expense!of!other!wetland/blanket!bog!specialist!species!(in!

some!cases!with!a!net!loss!of!biodiversity,!despite!gains!in!species!of!

conservation!significance)!

• Landowners!tend!to!favour!less!risky,!shortKterm!agreements!to!provide!

ecosystem!services,!but!investors!and!Government!need!to!ensure!these!benefits!

are!secured!for!the!longKterm!and!not!reversed.!This!may!limit!the!range!of!sellers!willing!to!enter!PES!schemes,!making!it!hard!to!meet!demand!and!target!the!most!degraded!sites.!A!minimum!contract!period!of!30!years!has!been!stipulated!in!the!

Peatland!Code,!reflecting!scientific!evidence!on!the!period!of!time!over!which!GHG!

emission!reductions!are!likely!(taking!account!of!the!initial!spike!in!methane!

production).!However!feedback!suggests!that!this!contract!length!is!likely!to!be!

unattractive!to!many!private!landowners,!due!to:!concerns!about!risks!associated!

with!the!arrival!of!more!profitable!alternative!land!uses!in!future!that!may!be!

precluded!by!these!agreements;!possible!negative!interactions!with!agri@

environment!payments;!and!possible!negative!effects!on!land!prices!if!they!wished!

to!sell!the!land!during!the!contract!period.!However,!there!are!a!number!of!

environmental!NGOs!with!significant!land@holdings!who!would!look!favourably!on!

these!contract!lengths!(and!in!most!cases!would!want!to!opt!for!longer!contracts).!

Discussions!with!these!NGOs!has!shown!that!there!is!sufficient!land!to!secure!

restoration!sites!for!the!pilot!phase!of!the!Peatland!Code.!During!the!pilot,!it!will!be!

possible!to!conduct!financial!modelling!of!restoration!costs!and!benefits!for!projects!

using!the!Code,!to!provide!private!landowners!with!more!detailed!information!about!

the!financial!risks!of!developing!projects.!It!may!also!be!possible!to!explore!

innovative!contractual!arrangements,!for!example!akin!to!some!that!have!emerged!

during!the!operation!of!the!Woodland!Carbon!Code,!where!a!30!year!contract!may!

be!agreed,!but!with!only!the!first!10!years!of!payments!accepted!up@front,!with!

prices!for!subsequent!10!year!periods!to!be!negotiated,!depending!on!future!carbon!

prices.!!

• Engaging!local!stakeholders!early!on!in!the!development!process!helps!create!the!

right!conditions!for!PES!schemes!to!develop!successfully.!Techniques!such!as!participatory!mapping!and!modelling!enable!better!understanding!of!different!

ecosystems!services!under!a!variety!of!scenarios,!enabling!trade@offs!to!be!

negotiated,!and!priorities!agreed.!Learning!from!work!with!South!West!Water!

(funded!in!parallel!to!this!project!with!members!of!this!project!team),!the!Code!

provides!a!detailed!typology!of!rights@holders!who!are!likely!to!be!affected!by!

projects!and!stipulates!a!minimum!consultation!period!of!8!weeks!

• There!are!a!number!of!ways!to!avoid!payments!for!one!service!(e.g.!climate!regulation!or!water!quality)!leading!to!tradeKoffs!with!other!services!that!are!

harder!to!monetise!and!market!(e.g.!biodiversity!or!aesthetic!benefits):!o One!option!is!to!create!additional!markets!for!as!many!of!these!additional!

services!as!possible,!and!run!these!in!parallel!and!co@ordinated!with!each!

!

! 34!

other!in!the!same!landscape.!The!advantage!of!this!approach!is!that!these!

additional!services!would!have!to!be!effectively!quantified!by!building!

monitoring!costs!into!these!projects,!which!would!enable!a!programme!co@

ordinating!parallel!schemes!to!more!accurately!identify!and!manage!trade@

offs!

o One!alternative!is!to!‘bundle’!these!co@benefits!with!the!anchor!service,!

which!can!then!be!marketed!at!a!higher!price,!effectively!paying!for!the!co@

benefits!but!without!the!need!for!such!rigorous!monitoring!of!co@benefits.!

This!is!the!approach!taken!in!the!UK!Peatland!Code,!which!is!effectively!a!

‘premium’!carbon!product!being!sold!to!the!Corporate!Social!Responsibility!

market.!The!Peatland!Code,!encourages!monitoring!of!co@benefits!where!

possible,!but!accepts!that!this!is!not!financial!viable!for!most!projects,!and!so!

allows!projects!to!create!a!narrative!based!on!published!evidence!of!the!

likely!benefits!of!peatland!restoration!in!their!particular!context,!which!is!

included!in!their!Environmental!Statement!

o Another!alternative!approach!is!to!integrate!payments!from!the!private!

sector!via!the!Peatland!Code!with!public!payments!for!ecosystem!services!

via!agri@environment!schemes.!If!this!integration!is!possible,!it!may!be!

possible!to!prioritise!(what!is!likely!to!be!a!shrinking!level!of)!public!funding!

for!agri@environment!options!that!are!hard!to!monetise!and!market,!

allowing!the!market!to!pay!for!options!that!have!a!market!value.!!

• Integration!of!private!PES!with!public!PES!via!agriKenvironmental!schemes!is!

technically!feasible,!and!may!lead!to!a!number!of!potential!benefits!and!challenges.!The!Code!allows!for!joint!funding!of!peatland!restoration!from!both!

private!funding!and!agri@environment!schemes.!The!detailed!mechanisms!for!how!

this!integration!might!be!achieved!in!practice!will!be!explored!during!the!pilot!phase!

of!the!Code’s!operation.!During!discussions!about!the!Peatland!Code!with!the!Welsh!

Government,!it!emerged!that!they!have!been!given!advice!suggesting!that!the!

integration!of!public!and!private!funding!within!agri@environment!schemes!is!likely!

to!be!allowed!under!EU!Common!Agricultural!Policy!regulations.!Such!integration!

may!address!some!of!the!social!justice!concerns!that!have!been!raised!in!the!

academic!literature!in!relation!to!the!distribution!of!funds!from!PES!schemes!to!

primarily!larger!landowners,!at!the!expense!of!smaller!landowners.!If!it!were!

possible!to!distribute!private!PES!funding!via!the!national!infrastructure!that!

currently!exists!for!making!agricultural!payments!(i.e.!via!the!Rural!Development!

Programmes,!RDPs),!it!may!be!possible!to!distribute!funds!more!equitably.!However,!

a!more!detailed!investigation!would!be!required!to!determine!if!this!integration!of!

funds!from!private!PES!and!public!funding!via!the!RDPs!were!technically!feasible!and!

compatible!with!the!needs!of!the!market,!given!that!investors!often!wish!to!target!

funding!towards!specific!locations!linked!to!their!business!or!products.!Further!

investigation!could!also!explore!the!potential!to!enable!private!PES!payments!via!the!

Code!to!run!in!parallel!with!RDP!payments.!

• The!research!has!demonstrated!that!there!is!a!strong!interest!in!sponsoring!peatland!

restoration!from!the!private!sector!(notably!from!the!food!and!drink!sector,!

hospitality,!whiskey!and!horticulture)!and!corporations!are!willing!to!pay!a!premium!

!

! 35!

for!UK@based!projects!that!deliver!climate!benefits!alongside!biodiversity!and!water!

benefits.!More!broadly,!a!number!of!more!generally!applicable!benefits!or!

motivations!for!business!to!engage!with!PES!schemes!may!be!inferred!from!this!research,!for!example:!

o For!some!business!sectors,!PES!can!help!reduce!costs!e.g.!water!intensive!

industries!or!business!that!require!high!water!quality!such!as!water!utilities!

and!drinks!manufacturers!

o For!some!companies,!PES!may!be!an!opportunity!to!meet!environmental!

obligations!(e.g.!corporate!carbon!accounting)!

o PES!can!demonstrate!corporate!responsibility!towards!the!natural!

environment!(where!this!includes!climate!mitigation!benefits,!it!may!in!

some!cases!be!possible!to!classify!these!investments!as!assets,!given!their!

potential!value!on!carbon!markets)!

o Some!businesses!can!use!PES!schemes!to!market!specific!product!lines!

linked!to!particular!habitats!or!services!(e.g.!food!and!drink,!

hospitality/tourism)!

Permanence!can!be!achieved!beyond!the!end!of!contracts!for!peatland!restoration!

projects.!The!Code!addresses!the!permanence!(see!glossary)!issue!legally!through!

covenants!placed!on!the!land,!and!practically!through!a!process!of!assessing!and!

managing!the!risks!of!restoration!being!reversed.!In!England!and!Wales,!it!will!soon!

be!possible!to!use!Conservation!Covenants4!to!allow!long@term!management!

agreements!to!follow!any!future!sale!of!the!property.!In!an!update!in!August!2013,!

the!Law!Commission!announced!it!would!be!going!ahead!with!a!draft!timetable!to!

legislation,!and!noted!the!strong!demand!expressed!during!the!consultation!for!

“providing!assurance!that!conservation!activity!will!be!undertaken!in!return!for!

payments!for!eco@system!services”.!In!Scotland,!a!covenant!would!be!secured!from!

the!current!landowner!not!to!part!with!ownership!without!securing!a!similar!

covenant!with!the!new!owner!(or!providing!an!equivalent!area!of!new!peatland!

restoration!that!is!likely!to!secure!a!similar!level!of!GHG!abatement!on!a!degraded!

but!previously!unrestored!site).!People!will!need!to!take!advice!on!equivalent!

procedures!in!Northern!Ireland.!In!addition!to!this,!projects!have!to!assess!the!risks!

that!restoration!may!be!reversed,!minimise!these!risks!and!set!aside!a!certain!

amount!of!their!projected!GHG!emission!savings!as!a!‘buffer’,!so!that!projects!can!

guarantee!their!emissions!savings.!Larger!buffers!are!needed!in!higher!risk!sites,!and!

the!risks!and!buffers!are!re@assessed!and!altered!as!necessary!throughout!the!

project.!Additional!protection!may!be!offered!where!sites!have!been!restored!

effectively!enough!to!warrant!designation!under!UK!or!EU!legislation,!for!example!as!

Sites!of!Special!Scientific!Interest.!

• The!UK!is!now!widely!perceived!to!be!leading!the!PES!agenda!in!Europe,!and!the!

UK!Peatland!Code!has!the!potential!to!become!a!template!for!similar!initiatives!internationally.!The!expertise!developed!through!this!pilot!project!may!make!it!

possible!to!develop!markets!for!other!habitats!and!ecosystem!services!in!future,!and!

for!the!UK!to!help!other!countries!develop!regional!carbon!markets!for!peatlands.!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!4 For more information see: lawcommission.justice.gov.uk/areas/conservation-covenants.htm.

!

! 36!

The!project!has!already!been!invited!to!present!experience!developing!the!UK!

Peatland!Code!to!a!conference!organized!by!the!German!Federal!Agency!for!Nature!

Conservation!(BfN)!in!co@operation!with!the!European!Network!of!Heads!of!Nature!

Conservation!Agencies!(ENCA),!and!other!opportunities!are!being!explored!by!

members!of!the!project!team.!!

In!conclusion,!the!UK!Peatland!Code!is!a!front@runner!in!the!development!of!guidance,!

frameworks!and!monitoring!to!underpin!the!development!of!PES!schemes!in!the!UK.!

Experience!from!the!development!of!the!Peatland!Code!fed!into!the!development!of!

Defra’s!PES!Best!Practice!Guidelines,!which!in!turn!informed!the!further!development!of!

the!Code.!The!experience!and!expertise!gained!during!this!Pilot!Project,!combined!with!

best!practice!guidance,!may!be!used!to!extend!PES!to!a!range!of!habitats!and!ecosystem!

services!across!the!UK!and!internationally.!PES!schemes!are!not!without!challenges.!

Some!of!these!challenges!are!more!conceptual!in!nature,!for!example!questions!around!

the!neo@liberalisation!of!conservation!policy!and!social!justice.!Other!challenges!are!

more!practical,!for!example!guaranteeing!the!permanence!of!GHG!emission!reductions!

and!determining!how!private!payments!for!ecosystem!services!may!interface!with!public!

payments!via!agri@environment!schemes.!Although!many!of!these!challenges!remain!

outstanding,!the!development!of!the!UK!Peatland!Code!has!provided!an!opportunity!to!

tackle!a!number!of!these!conceptual!and!practical!challenges.!This!has!been!successful!

enough!for!us!to!be!able!to!launch!a!pilot!phase!of!operation,!in!which!it!will!be!possible!

to!further!investigate!and!tackle!the!remaining!challenges!of!successfully!operating!PES!

in!UK!peatlands.!!

!! !

!

! 37!

References!

!Artz,!R.R.E.,!Chapman,!S.J.,!Donnelly,!D.!&!Matthews,!R.!(2012)!Potential!abatement!from!peatland!

restoration.!Briefing!Note!to!Scottish!Government.!http://www.climatexchange.org.uk/documents/cxc1202@02.pdf.!

Baird,!A.J.,!Holden,!J.!&!Chapman,!P.J.!(2009)!A!literature!review!of!evidence!on!emissions!of!methane!in!peatlands.!Report!to!Defra!SP0574.!http://randd.defra.gov.uk/Document.aspx?Document=SP0574_8526_FRP.pdf!

Bain,!C.,!Bonn,!A.,!Stoneman,!R.,!Chapman,!S.,!Coupar,!A.,!Evans,!M.,!Geary,!B.,!Howat,!M.,!Joosten,!H.,!Keenleyside,!C.,!Lindsay,!R.,!Labadz,!J.,!Littlewood,!N.,!Lunt,!P.,!Miller,!C.,!Moxey,!A.,!Orr,!H.,!Reed,!M.S.,!Smith,!P.,!Swales,!V.,!Thompson,!D.B.A.,!Van!de!Noort,!R.,!Wilson,!J.D.!&!Worrall,!F.!(2011)!Commission!of!Inquiry!on!UK!Peatlands.!IUCN!UK!Peatland!Programme,!Edinburgh.!http://www.iucn@uk@peatlandprogramme.org/resources/188.!

Billett,!M.,!Charman,!D.J.,!Clark,!J.M.,!Evans,!C.,!Evans,!M.,!Ostle,!N.,!Worrall,!F.,!Burden,!A.,!Dinsmore,!K.,!Jones,!T.,!McNamara,!N.,!Parry,!L.,!Rowson,!J.!&!Rose,!R.!(2010)!Carbon!balance!of!UK!peatlands:!current!state!of!knowledge!and!future!research!challenges.!Climate!Research,!45,!13@29.!http://www.int@res.com/abstracts/cr/v45/p13@29/.!

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Bonn,!A.,!Allott,!T.,!Hubacek,!K.!&!Stewart,!J.!(2009a)!Drivers!of!environmental!change!in!uplands.!Routledge,!London!and!New!York.!!

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Couwenberg,!J.!(2011)!Greenhouse!gas!emissions!from!managed!peat!soils:!is!the!IPCC!reporting!guidance!realistic?!Mires!and!Peat,!8,!Article!02,!01–10.!!

Couwenberg,!J.,!Thiele,!A.,!Tanneberger,!F.,!Augustin,!J.,!Bärisch,!S.,!Dubovik,!D.,!Liashchynskaya,!N.,!Michaelis,!D.,!Minke,!M.,!Skuratovich,!A.!&!Joosten,!H.!(2011)!Assessing!greenhouse!gas!emissions!from!peatlands!using!vegetation!as!a!proxy.!Hydrobiologia,!674,!67@89.!!

European_Commission!(2011)!Our!life!insurance,!our!natural!capital:!an!EU!biodiversity!strategy!to!2020.!Communication!from!the!Commission!to!the!European!parliament,!the!council,!the!economic!and!social!committee!and!the!committee!of!the!regions.!COM!(2011)!244!final.!http://ec.europa.eu/environment/nature/biodiversity/comm2006/pdf/2020/1_EN_ACT_part1_v7%5B1%5D.pdf.!

Frolking,!S.,!Roulet,!N.!&!Fuglestvedt,!J.!(2006)!How!northern!peatlands!influence!the!Earth's!radiative!budget:!Sustained!methane!emission!versus!sustained!carbon!sequestration.!J.!Geophys.!Res.,!111,!G01008.!http://dx.doi.org/10.1029/2005JG000091.!

Gallego@Sala,!A.,!Clark!J.,!House!J.,!Orr!H.,!Prentice!I.,!Smith!P,!Farewell!T.,!Chapman!S.!(2010).!Bioclimatic!envelope!model!of!climate!change!impacts!on!blanket!peatland!distribution!in!Great!Britain.!Climate!Research!Special!Issue!24.!Available!at:!http://www.int@!res.com/articles/cr_oa/special/BUppp4.pdf!

Gallego@Sala,!A.V.!&!Colin!Prentice,!I.!(2012)!Blanket!peat!biome!endangered!by!climate!change.!Nature!Clim.!Change,!advance!online!publication.!http://dx.doi.org/10.1038/nclimate1672.!

HM!Government.!(2011).!The!Natural!Choice:!Securing!the!Value!of!Nature.!HM!Government,!London.!www.official@documents.gov.uk/document/cm80/8082/8082.pdf.!

Holden,!J.,!Shotbolt,!L.,!Bonn,!A.,!Burt,!T.P.,!Chapman,!P.J.,!Dougill,!A.J.,!Fraser,!E.D.G.,!Hubacek,!K.,!Irvine,!B.,!Kirkby,!M.J.,!Reed,!M.S.,!Prell,!C.,!Stagl,!S.,!Stringer,!L.C.,!Turner,!A.!&!Worrall,!F.!(2007)!Environmental!change!in!moorland!landscapes.!EarthEScience!Reviews,!82,!75@100.!!

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IPCC!(2006)!2006!IPCC!Guidelines!for!National!Greenhouse!Gas!Inventories.!Volume!4!Agriculture,!forestry!and!other!land!use.!Prepared!by!the!National!Greenhouse!Gas!Inventories!Programme.!Eggleston!H.S.,!Buendia!L.,!Miwa!K.,!Ngara!T.!and!Tanabe!K.!(eds).!Institute!for!Global!Environmental!Strategies,!Hayama,!Japan.!!

IPCC!(2012)!2013!Revised!Supplementary!Methods!and!Good!Practice!Guidance!arising!from!the!Kyoto!Protocol.!http://www.ipcc@nggip.iges.or.jp/newsdoc/120611TORetc.pdf.!

JNCC!(2011)!Towards!an!assessment!of!the!state!of!UK!peatlands.!Joint!Nature!Conservation!Committee!report!No!445.!http://jncc.defra.gov.uk/page@5861#download.!

Joosten,!H.!(2009)!The!global!peatland!CO2!picture.!Peatland!status!and!drainage!related!emissions!in!all!countries!of!the!world.!Wetlands!International,!Ede.!http://www.wetlands.org/LinkClick.aspx?fileticket=o%2bd%2bTaPldLI%3d&tabid=56.!

Joosten,!H.!(2011)!Sensitising!global!conventions!for!climate!change!mitigation!by!peatlands.!.!In!Carbon!Credits!from!peatland!rewetting.!Climate!E!biodiversity!E!land!use.!(eds!F.!Tanneberger!&!W.!Wichtmann),!pp.!90@94.!Schweizerbart!Science!publishers,!Stuttgart.!!

Joosten,!H.,!Tapio@Biström,!M.@L.!&!Tol,!S.!(2012)!Peatlands!–!guidance!for!climate!change!mitigation!by!conservation,!rehabilitation!and!sustainable!use.!Food!and!Agriculture!Organization!of!the!United!Nations!(FAO),!Rome.!http://www.fao.org/docrep/015/an762e/an762e.pdf.!

Joosten,!H.,!Sirin,!A.,!Couwenberg,!J.,!Laine,!J.!&!Smith,!P.!(2013)!The!role!of!peatlands!in!climate!regulation.!In!Peatland!restoration!and!ecosystem!services!(eds!A.!Bonn,!T.!Allott,!M.!Evans,!H.!Joosten!&!R.!Stoneman).!Cambridge!University!Press,!Cambridge.!!

Komulainen,!V.@M.,!Tuittila,!E.@S.,!Vasander,!H.!&!Laine,!J.!(1999)!Restoration!of!drained!peatlands!in!southern!Finland:!initial!effects!on!vegetation!change!and!CO2!balance.!Journal!of!Applied!Ecology,!36,!634@648.!http://dx.doi.org/10.1046/j.1365@2664.1999.00430.x.!

Kronenberg,!J.,!and!K.!Hubacek.!2013.!Could!payments!for!ecosystem!services!create!an!"ecosystem!service!curse"?!Ecology!and!Society!18(1):!10.!http://dx.doi.org/10.5751/ES@05240@180110!!

Littlewood,!N.,!Anderson,!P.,!Artz,!R.,!Bragg,!O.,!Lunt,!P.!&!Marrs,!R.!(2010)!Peatland!biodiversity.!Report!to!IUCN!UK!Peatland!Programme,!Edinburgh.!http://www.iucn@uk@peatlandprogramme.org/.!

Marsden,!K.,!Ebmeier,!S.!(2012).!Peatlands!and!Climate!Change.!SPICe!Briefing!SB12/28.!Available!online!at:!http://www.scottish.parliament.uk/ResearchBriefingsAndFactsheets/S4/SB_12@28.pdf!

McAfee,!K.!(2012)!The!contradictory!logic!of!global!ecosystem!services!markets.”!Development!and!Change!43:!105@131.!

!Minkkinen,!K.!&!Laine,!J.!(2006)!Vegetation!heterogeneity!and!ditches!create!spatial!variability!in!methane!fluxes!from!peatlands!drained!for!forestry.!Plant!and!Soil,!285,!289@304.!http://dx.doi.org/10.1007/s11104@006@9016@4.!

MLUV!(2009)!Konzept!zum!Schutz!und!zur!Nutzung!der!Moore.!Fortschreibung!des!Konzeptes!zur!Bestandssicherung!und!zur!Entwicklung!der!Moore!in!MecklenburgEVorpommern!(Moorschutzkonzept).!Ministerium!für!Landwirtschaft,!Umwelt!und!Verbraucherschutz!Mecklenburg@Vorpommern,!Schwerin.!http://www.regierung@mv.de/cms2/Regierungsportal_prod/Regierungsportal/de/lm/_Service/Publikationen/?publikid=2351.!

Monbiot,!G.,!(2012)!Putting!a!price!on!the!rivers!and!rain!diminishes!us!all.!The!Guardian,!Monday!6!August!2012,!available!online!at:!http://www.theguardian.com/commentisfree/2012/aug/06/price@rivers@rain@greatest@privatisation!

O'Sullivan,!R.!&!Emmer,!I.!(2011)!Selling!peatland!rewetting!on!the!voluntary!carbon!market.!In!Carbon!Credits!from!peatland!rewetting.!Climate!E!biodiversity!E!land!use.!(eds!F.!Tanneberger!&!W.!Wichtmann),!pp.!90@94.!Schweizerbart!Science!publishers,!Stuttgart.!!

Parish,!F.,!Sirin,!A.,!Charman,!D.,!Joosten,!H.,!Minayeva,!T.,!Silvius,!M.!&!Stringer,!L.!(2008)!Assessment!on!Peatlands,!Biodiversity!and!Climate!Change:!Main!Report.!Global!Environment!Centre,!Kuala!Lumpur!and!Wetlands!International,!Wageningen.!http://www.wetlands.org/LinkClick.aspx?fileticket=rrsz0gGwYfA%3d&tabid=56.!

Quick,!T.,!Reed,!M.S.,!Smyth,!M.,!Birnie,!R.,!Bain,!C.,!Rowcroft,!P!and!White,!A!(2013)!Developing!placeEbased!approaches!for!Payments!for!Ecosystem!Services,!URS!London.!

Raghoebarsing,!A.A.,!Smolders,!A.J.P.,!Schmid,!M.C.,!Rijpstra,!W.I.C.,!Wolters@Arts,!M.,!Derksen,!J.,!Jetten,!M.S.M.,!Schouten,!S.,!Sinninghe!Damste,!J.S.,!Lamers,!L.P.M.,!Roelofs,!J.G.M.,!Op!den!

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Camp,!H.J.M.!&!Strous,!M.!(2005)!Methanotrophic!symbionts!provide!carbon!for!photosynthesis!in!peat!bogs.!Nature,!436,!1153@1156.!http://dx.doi.org/10.1038/nature03802.!

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Settelmyer,!S.!&!Eaton,!J.!(2010)!Feasibility!assessment.!Program!design!for!carbon!based!restoration!of!UK!peatlands.!Report!funded!by!University!of!Aberdeen.!!

Stoneman,!R.,!Kumaran@Prentice,!S.,!Bain,!C.,!Reed,!M.,!Swales,!V.,!Locky,!D.!&!McLaughlan,!M.!(2013)!Policy!drivers!for!peatland!conservation.!In!Peatland!restoration!and!ecosystem!services!(eds!A.!Bonn,!T.!Allott,!M.!Evans,!H.!Joosten!&!R.!Stoneman).!Cambridge!University!Press,!Cambridge.!!

van!der!Wal,!R.,!Bonn,!A.,!Monteith,!D.,!Reed,!M.,!Blackstock,!K.,!Hanley,!N.,!Thompson,!D.,!Evans,!M.,!Alonso,!I.!&!Beharry@Borg,!N.!(2011)!UK!National!Ecosystem!Assessment.!Chapter!4:!Mountains,!Moorlands!and!Heaths.!Defra.!http://uknea.unep@wcmc.org/LinkClick.aspx?fileticket=CZHaB2%2fJKlo%3d&tabid=82.!

Waddington,!J.M.,!Strack,!M.!&!Greenwood,!M.J.!(2010)!Toward!restoring!the!net!carbon!sink!function!of!degraded!peatlands:!Short@term!response!in!CO2!exchange!to!ecosystem@scale!restoration.!J.!Geophys.!Res.,!115,!G01008.!http://dx.doi.org/10.1029/2009JG001090.!

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!Worrall,!F.,!Chapman,!P.,!Holden,!J.,!Evans,!C.,!Artz,!R.,!Smith,!P.!&!Grayson,!R.!(2011a)!A!review!of!current!evidence!on!carbon!fluxes!and!greenhouse!gas!emissions!from!UK!peatlands.!JNCC!research!report!442,!Peterborough.!http://jncc.defra.gov.uk/pdf/jncc442_webFinal.pdf.!

Worrall,!F.!&!Evans,!M.G.!(2009)!The!carbon!budget!of!upland!peatland!soils.!In!Drivers!of!environmental!change!in!uplands!(eds!A.!Bonn,!T.!Allott,!K.!Hubacek!&!J.!Stewart),!pp.!93@112.!Routledge,!London!and!New!York.!!

Worrall,!F.,!Evans,!M.G.,!Bonn,!A.,!Reed,!M.S.,!Chapman,!D.S.!&!Holden,!J.!(2009)!Can!carbon!offsetting!pay!for!upland!ecological!restoration?!Science!of!The!Total!Environment,!408,!26@36.!!

Worrall,!F.,!Chapman,!P.,!Holden,!J.,!Evans,!C.,!Artz,!R.,!Smith,!P.!&!Grayson,!R.!(2010)!Peatlands!and!climate!change.!Report!to!IUCN!UK!Peatland!Programme,!Edinburgh.!www.iucn@uk@peatlandprogramme.org/scientificreviews!

Worrall,!F.,!Rowson,!J.G.,!Evans,!M.G.,!Pawson,!R.,!Daniels,!S.!&!Bonn,!A.!(2011b)!Carbon!fluxes!from!eroding!peatlands!–!the!carbon!benefit!of!revegetation!following!wildfire.!Earth!Surface!Processes!and!Landforms,!36,!1487@1498.!http://dx.doi.org/10.1002/esp.2174.!

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Glossary!

Additionality – A project is ‘additional’ if it, and the activities supported by it, could not have happened without private sponsorship. Baseline – The projected changes to carbon on the site if the project weren’t to go ahead (the ‘business as usual’ scenario). This is a reference projection to which the GHG emission reduction benefits of project activities can be compared over the project lifetime. Buffer – A carbon pool of ‘unclaimed carbon’ to cover either uncertainty in carbon measurement or unavoidable potential losses which may occur from the project over time, thus ensuring the permanence of Greenhouse Gas emission reductions. Carbon reporting involves a carbon owner or organisation formally reporting Greenhouse Gas emission reductions in accordance with Defra’s ‘Guidance on how to measure and report your greenhouse gas emissions’. This can only be done once, after a GHG emission reduction have been achieved, and implies that the tCO2e reported has been ‘retired’ (i.e. it cannot be reported again). See Carbon statement. Carbon statement – a statement of the GHG emission reductions a project has achieved to date. It can be restated by more than one party with an interest in a project. See Carbon reporting. Carbon dioxide (CO2) – A naturally occurring gas and by-product of burning fossil fuels or biomass, land-use changes and industrial processes. It is the principal anthropogenic (caused by human activity) greenhouse gas that affects the Earth’s climate. Carbon offsetting – A way of compensating for greenhouse gas emissions by making an equivalent carbon dioxide saving elsewhere. In UK peatlands this may be done via voluntary carbon markets (e.g. under Verified Carbon Standard methodology for peatland rewetting). Certification – Registration and assessment of a project against the criteria of the Code by an independent body accredited by UK Accreditation Service. Climate change – Change or changes in the climate which can be directly or indirectly attributed to human activity (UNFCCC Article 1). Co-benefits – additional ecosystem service benefits (e.g. biodiversity or water quality) arising from a scheme that is designed to pay for one ecosystem service (e.g. climate change mitigation) Double-counting – Double-counting occurs when the same tonne of carbon dioxide is claimed by two separate entities, or when the same tonne of carbon dioxide is sold more than once. Environmental Impact Assessment (EIA) – These regulations apply to many peatland restoration projects, which may require consent for the work from the relevant authority (e.g. Natural England) and submit an Environmental Statement as part of the application for consent. Greenhouse gases (GHGs) – Greenhouse gases. The gases which are causing the warming of the Earth’s atmosphere that is leading to climate change. The Kyoto Protocol deals with 6 of these: carbon dioxide, hydrofluorocarbons, methane, nitrous oxide, perfluorocarbons and sulphur-hexafluoride. These contribute to the ‘greenhouse effect’. Group Scheme – A group of projects that work together to gain certification. Such schemes are not eligible under the Pilot Phase of the Code.

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Leakage – is GHG emissions outside the project boundary as a result of the project (e.g. displacement of agricultural activities might result in peatland degradation or intensification of use of non-degraded peatlands elsewhere). Mitigation – Implementing activities or policies to reduce greenhouse gas emissions and/or enhance carbon storage. Organic Soil – Soil which contains more than 50cm deep organic (or peat) surface horizon overlaying the mineral layer or rock. Peatlands - land dominated by histosols (this definition is used because it does not require peatland vegetation, which is important for degraded sites that are to be restored). Following the UN Food & Agriculture Organisation definition, histosols must have an organic matter content > 20% in their upper horizon, and they should have an average depth > 40cm. Peatlands may be active (where peat is currently forming and accumulating) or inactive (lacking current peat formation). This soil may or may not be currently covered by peat forming vegetation such as Sphagnum moss. For the purposes of the Code, peatlands include sites were peat deposits have been lost due to human activities (e.g. previous peat extraction, human-induced peatslides, wildfire, severe erosion exacerbated by overgrazing, pollution, burning, or agricultural wastage of peat), but that can feasibly be safeguarded and/or restored to active building peat bog status. Permanence – The issue of ensuring that removal of carbon dioxide from the atmosphere is permanent, and not reversed at a future point in time. Peatland projects carry a risk of reversibility and as such safeguards must be in place to minimise that risk and to guarantee replacement or compensatory peatland restoration should a reversal occur. Project – individual woodland creation project under the same ownership and management. A project could encompass more than one site. Project Design Document (PDD) – A document created by a project manager to describe how the project meets the requirements of the Code. Project Duration –The time over which project activities are to be implemented, monitored and GHG emission reduction claims is to be claimed. Projects can be 30-100 years in duration. Project Start Date – The date when restoration works begin. Regional Carbon Market – a carbon market in which all sellers are based in the same geographical region, with region-specific guidance developed for buyers, sellers and intermediaries to provide the market with confidence that investments will lead to measurable and additional benefits. The majority of buyers are likely to come from the same region, but such schemes do not necessarily exclude international buyers. MoorFutures in Germany and the Peatland Code are examples of guidance developed to facilitate regional carbon markets. The Register of UK Peatland Code Projects – the official record of the location of projects, the predicted and actual GHG emission reductions as well as the owners of that carbon. Restoration – a process that returns the conditions necessary for long term retention of semi-natural vegetation cover, with its typical species and habitats, to damaged peatland, reducing or halting carbon loss and allows peat accumulation to take place again, over the long-term. Restoration management may range from slight adjustments, such as reducing grazing and managed burning levels, to more substantial works such as rewetting to elevate the average annual water table through ditch blocking in formerly drained sites, or stabilising peat through re-vegetation of bare eroding peat. Retirement – when carbon credits are removed from the market, and can no longer be traded.

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Validation – The initial evaluation of a project against the standards of the Peatland Code, undertaken by a certification body accredited by the UK Accreditation Service. Verification – The ongoing evaluation of a project against the standards of the Peatland Code, undertaken by a certification body accredited by the UK Accreditation Service. Verification shall first take place within 5 years of validation and thereafter at periods of 10 years or less. It will assess the GHG emission reductions that have actually occurred as well as continuing sustainable peatland management according to good practice guidelines ! !

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Acknowledgements!

!

Thanks!to!everyone!who!provided!constructive!feedback!on!the!first!draft!of!the!Peatland!Code.!

Thanks!to!all!the!participants!in!the!workshop!in!Berlin,!Germany!from!30!January!to!1!Febrary!2013,!

who!are!not!named!as!co@authors!on!this!report,!but!who!contributed!to!the!insights!through!

discussion.!!Thanks!to!UK@based!interviewees!from!the!research!community!who!could!not!attend!the!

workshop,!but!who!were!interviewed!to!provide!feedback!on!the!adaptation!of!the!GEST!approach!to!

UK!peatlands!as!part!of!Defra!project!NE0136.!Thanks!to!participants!in!the!Valuing!Nature!Network!

workshop!in!Leeds!on!19th!January!2012,!and!participants!in!the!IUCN!UK!Peatland!Programme!

conference!in!Bangor!on!26@28!June!2012,!which!informed!early!versions!of!Figure!2!and!created!an!

initial!route!map!towards!the!development!of!the!Peatland!Code.!And!thanks!to!the!Rural!Economy!&!

Land!Use!programme,!who!funded!the!initial!background!research!and!have!continued!to!support!and!

promote!the!development!of!the!Peatland!Code.!Parts!of!this!Final!Report!have!been!submitted!for!

publication!in!the!journal!Ecosystem!Services.!!!Limitations!and!disclaimer!!

Birmingham!City!University!has!prepared!this!report!for!the!sole!use!Defra!(“Client”)!in!accordance!

with!the!Agreement!under!which!our!services!were!performed!(Project!number:!NE0141).!No!other!

warranty,!expressed!or!implied,!is!made!as!to!the!professional!advice!included!in!this!report!or!any!

other!services!provided!by!BCU.!The!copyright!for!this!report!belongs!to!the!authors,!and!no!other!

copying!or!reproduction!of!this!report!is!allowed!without!written!permission!from!the!authors.!The!

authors!retain!the!right!to!publish!parts!of!this!report!in!other!publications,!with!full!

acknowledgement!of!funding!from!Defra.!Some!of!the!conclusions!and!recommendations!contained!

in!this!report!are!based!upon!information!provided!by!sub@contractors!and!upon!the!assumption!that!

all!relevant!information!provided!by!those!parties!is!accurate.!!Information!obtained!by!BCU!has!not!

been!independently!verified!by!BCU,!unless!otherwise!stated!in!the!report.!The!methodology!adopted!

and!the!sources!of!information!used!by!BCU!in!providing!its!services!are!outlined!in!this!report.!The!

work!described!in!this!report!was!undertaken!between!01/11/12!and!31/08/13!and!is!based!on!the!

conditions!encountered!and!the!information!available!during!the!said!period!of!time.!The!scope!of!

this!report!and!the!services!are!accordingly!factually!limited!by!these!circumstances.!Where!

assessments!of!works!or!costs!identified!in!this!report!are!made,!such!assessments!are!based!upon!

the!information!available!at!the!time!and!where!appropriate!are!subject!to!further!investigations!or!

information!which!may!become!available.!BCU!disclaim!any!undertaking!or!obligation!to!advise!any!

person!of!any!change!in!any!matter!affecting!the!report,!which!may!come!or!be!brought!to!BCU’s!

attention!after!the!date!of!the!report.!Certain!statements!made!in!the!report!that!are!not!historical!

facts!may!constitute!estimates,!projections!or!other!forward@looking!statements!and!even!though!

they!are!based!on!reasonable!assumptions!as!of!the!date!of!the!report,!such!forward@looking!

statements!by!their!nature!involve!risks!and!uncertainties!that!could!cause!actual!results!to!differ!

materially!from!the!results!predicted.!BCU!specifically!does!not!guarantee!or!warrant!any!estimate!or!

projections!contained!in!this!report.!

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Appendices:!Appendix!1:!UK!Peatland!Code!

Appendix!2:!Response!to!public!feedback!on!draft!Code!

Appendix!3:!Market!Research!Report!

Appendix!4:!Leaflet!

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Appendix!1:!UK!Peatland!Code!! !

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Draft UK Peatland Code

September 2013

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Contents

1. Introduction 4 1.1 Why Peatlands? 4 1.2 Why do we need a Code? 5 1.3 Pilot Phase 6

2. Eligibility 8 2.1 Project start date and duration 8 2.2 Eligible activities 9 2.3 Eligible land 10 2.4 Compliance with the law 12 2.5 Additionality 13

3. Project governance 15 3.1 Registry and avoidance of double counting 15 3.2 Management of risks and permanency 16 3.3 Consultation 18 3.4 Group schemes 19

4. Documentation 20 4.1 Project Design Documentation 20 4.2 Management plan and capacity 21 4.3 Carbon statements and reporting 23 4.4 Peatland Code logo 23

5. Monitoring climate and other benefits 24 5.1 Establishing a carbon baseline 24 5.2 GHG leakage 25 5.3 Monitoring climate benefits 25 5.4 Co-benefits 28 Glossary 29

Sphagnum tenellum © Andy Amphlett

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1. Introduction

The UK Peatland Code is designed to provide an open, credible and verifiable basis for business sponsorship of specific pilot projects undertaking UK peatland restoration. The Code will assure that restoration delivers tangible climate change mitigation benefits, alongside other services, such as providing habitats for vulnerable peatland species and improving water quality. At this stage, a pilot phase draft Code is designed to facilitate business sponsorship5 motivated by corporate social responsibility; it is not currently intended for use in carbon offset6 schemes, corporate carbon reporting or to be traded on international carbon markets. The Code does provide guidance on quantifying climate and other benefits, to reinforce the value of the sponsoring restoration, and it may be possible to count these benefits in corporate carbon accounts if Government guidelines allow in future. It may also be possible to trade this carbon on carbon markets in future via additional verification to accepted international standards. However, these options are not included in this draft Code for the Pilot Phase. !

Blanket bog of the Flow Country, Forsinard © RSPB

!1.1 Why peatlands? Peatlands are the UK’s largest soil-carbon store and substantially exceed the total carbon stored in living biomass. Peatlands sequester carbon slowly over millennial timescales, but in their damaged state they can release this carbon store rapidly. The International Union for the Conservation of Nature’s (IUCN) Commission of Inquiry on Peatlands7 highlighted in 2011 !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!5 Sponsorship in the context of this Code refers to payments that are made from the private sector in return for the provision of ecosystem services, principally climate change mitigation, which is quantified, along with unquantified co-benefits including biodiversity and water quality. During Phase 1 of the Code, there is no option to trade carbon credits to obtain a financial return on investment. However, it is expected that sponsors will be paying for the ecosystem services they sponsor to balance against their own business activities in some form, for example incentivising sales of a certain product by using a portion of the sale price to restore peatlands. Sponsors will need to be clear therefore that the ecosystem services, once used in this way, cannot be banked for future re-sale, and it may not be possible to re-use them in any subsequent carbon trading regime 6 Schemes that generate tradable carbon credits that can be used to offset the emissions of sponsors 7 Bain CG, Bonn A, Stoneman R, Chapman S, Coupar A, Evans M, Gearey B, Howat M, Joosten H, Keenleyside C, Labadz J, Lindsay R, Littlewood N, Lunt P, Miller C, Moxey A, Orr H, Reed MS, Smith P, Swales V, Thompson DBA, Thompson PS, Van de Noort R, Wilson JD, Worrall F (2011) IUCN UK Commission of Inquiry on Peatlands. Edinburgh, IUCN UK Peatland Programme.

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that around 80% of UK peatlands have been damaged in some form. In the past, peatlands were not valued for the natural services they provide and were often drained, leaving them in a deteriorating state that gives rise to potentially major carbon loss. In recent years however, restoration techniques have been developed and used across the UK that can help repair the damage. Using good practice restoration techniques, restoring damaged peat lands can help mitigate climate change by reducing carbon loss from these systems, whilst creating healthy peatlands that can absorb and lock up carbon dioxide from the atmosphere. Peatlands are the UK’s most extensive semi-natural habitats, harbouring internationally important wildlife. They are also source areas for the majority of the UK’s drinking water. Degraded peatlands increase costs of water treatment, which restoration can safeguard against. Across the UK there is considerable potential for peatland restoration with excellent demonstration projects. These include single sites managed by wildlife conservation charities and partnership projects involving several private and public land managers working together to restore large tracts of land8. Three types of peatland are most extensive in the UK: blanket bogs, raised bogs and fens. The Peatland Code currently provides detailed guidance for implementing and monitoring restoration in blanket bogs, as these are the more extensive habitat (covering 95% of peatlands) and hence have greater potential for climate change mitigation and other co-benefits. However, the Pilot Phase will explore the potential for raised bogs and fens to be considered for fuller inclusion in the Peatland Code in future, with more detailed guidance featuring in later phases as this becomes available.

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Restoration at Blackpitts, Exmoor Forsinard ©SouthWestWater

1.2 Why do we need a Code? The proposal for a UK Peatland Code initially emerged from a meeting of peatland researchers, practitioners and members of the policy community convened by the IUCN UK

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!8 Cris R, Buckmaster S, Bain C, Bonn A (eds.) (2011) UK Peatland Restoration - Demostrating Success. IUCN UK National Committee Peatland Programme, Edinburgh.

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Peatland Programme conference in Stirling in 2011. The Government’s 2011 Natural Environment White Paper emphasised the creation of new markets to pay for nature’s services. It announced the formation of Defra’s Ecosystem Markets Taskforce, which ranked a UK Peatland Code as their joint top opportunity out of 44 that were submitted. The Natural Environment White Paper committed to producing a Payment for Ecosystem Service Action Plan, which Defra published in May 2013, and which highlighted peatland restoration via a Peatland Code as one of five specific opportunity areas. This committed Defra to a number of specific actions, including the launch of a pilot Peatland Code. In a letter to the IUCN UK Peatland Programme in February 2013, the four country Ministers welcomed IUCN’s work and set out a framework for action including co-operation and co-ordinated action to support the development of a Peatland Code. This intention was re-iterated in the UK Government’s National Adaptation Plan (July 2013), and by the Committee on Climate Change who highlighted the development of a Peatland Code as a “key priority” (July 2013). The UK Peatland Code is designed to provide the scientific and regulatory basis for peatland restoration, guiding projects in the quantification of carbon and other benefits of restoration. The Code also gives potential corporate sponsors confidence that their financial contribution is making a measurable and verifiable difference to UK peatlands, and enables them to report this to their stakeholders. The Code builds on an extensive body of research into the climate and associated benefits of peatland restoration, and good practice in peatland restoration, initially collated by the IUCN UK Peatland Programme’s Commission of Inquiry on Peatlands in 20114,9. Specific objectives of the Code are to:

· Provide an open, consistent and credible basis for good peatland restoration practice in line with documented good practice · Ensure that projects are designed to deliver tangible benefits for climate

change and are implemented in a manner likely to promote other key ecosystem service benefits (in particular the protection of important habitats and species, and for example, improvements in water quality) and in a manner that is consistent with the long term functioning of the ecosystem · Provide technical guidance to help projects quantify climate and other

benefits in a consistent and credible manner · Establish a system of independent quality assurance through the introduction

of procedures for registering, validating and verifying the climate and other benefits of peatland restoration projects.

1.3 Pilot Phase The aim of the Pilot Phase is to encourage early sponsorship of peatland restoration to help demonstrate peatland benefits and build an increasingly robust evidence base and methodology for future phases of Code development. The Pilot Phase will focus on further developing the infrastructure for the Code, including: testing and refining proxy models for carbon monitoring and developing a standardised field

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!9 This draft Code has been developed through research funding from Defra as one of its Payment for Ecosystem Service Pilots, with additional funding from Natural England to develop metrics for measuring the GHG emission reduction benefits of restoration. Initial consultation, outlines of the Code and underpinning reseach was funded by the Natural Environment Research Council's Valuing Nature Network, which built on original research funded by the Rural Economy & Land Use programme.

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protocol for vegetation monitoring; developing evidence-based financial analysis of the various life-cycle costs associated with investing in peatland restoration; and work with the UK Accreditation Service (UKAS) and existing third-party UKAS-accredited auditors to develop protocols to assess and accredit auditors (referred to as “certification bodies” in the Code) and projects under the Peatland Code. The goal is to eventually develop a registry for Peatland Code projects to issue and record ownership and transfers of GHG emission reduction credits and their retirement (see glossary), cancellation or suspension under different circumstances. Peatland restoration best practice guidance is currently being updated by IUCN UK Peatland Programme, John Muir Trust and Yorkshire Wildlife Trust. The subsequent sections describe the UK Peatland Code in its current draft form, and provide detailed guidance for projects and sponsors that wish to take part in the pilot phase. Although the pilot phase is targeting the CSR market, by adhering to the Code, sponsors maximise the likelihood that their projects can be accredited under subsequent phases of the Code, and provide valuable experience that can be used to further refine the Code. They set out principles, requirements and guidance for the eligibility of projects, project governance and documentation, and monitoring of climate and co-benefits.

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2. Eligibility This section sets out the requirements for eligibility. Principles

The project must be eligible in terms of:

· The timing of the project

· The type of activity undertaken

· Land ownership and tenure rights

· Compliance with all relevant legislation

· Demonstrating additionality (i.e. only viable due to availability of sponsorship for peatland restoration)

2.1 Project start date, duration and contracts

Requirement

Projects shall register within 2 years of the project start date. Once independent certification bodies have been accredited by UKAS, all projects are expected to be validated within 3 years of registration.

Projects shall have a clearly defined duration, with a minimum of 30 years. Although the upper limit would normally be 100 years, longer contracts may be possible. For information about contractual issues, see section 2.3.

Means of verification

· Project Design Document · Contracts between buyers and sellers

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Guidance

The project start date is the date when restoration begins.

The project duration is the time over which project activities are to be implemented, monitored, and Greenhouse Gas emission reduction claims are to be made.

The project duration should not be confused with permanence. All projects shall involve a permanent land-use change to a restored and healthy peatland ecosystem (as defined in section 3.2).

Contracts between buyers (sponsors) and sellers (landowners/tenants with intermediaries) should cover a number of issues, which may include:

• Assignment of GHG abatement rights for the contract period, including any surpluses

• Duration of the project • Definition/location of the land subject to the agreement • Guarantee that management practices are carried out as laid down in the

management plan • Naming/branding/promotional rights for investors/intermediaries (e.g. signs on

display) • Maintenance of public access • In event of land sale, actions to inform buyers of the terms of contract and/or secure

buyer agreement to observe this contract • Provision of alternative sites if land ceases to be available for purposes of the

contract • Avoidance of technical claims about Greenhouse Gas emission reductions without

prior approval • Confirmation of periodic verification

2.2 Eligible activities

Requirement

Eligible activities shall be those relating to peatland restoration through re-wetting, or re-wetting in combination with other land management change required to re-establish species that are normally peat-forming, for example Sphagnum bog mosses and, where relevant, other species identified in designations where these are applicable. Previous land management practices that led to degradation of the site (the management baseline) need to be identified to ensure management under restoration differs from this baseline and supports restoration.

Means of verification

· Statement on land use in Project Design Document

· Existing land use records that can be verified by other relevant evidence such as the use of secondary data (e.g. use of satellite imagery where necessary to determine changes in burning intensity) and/or where existing records are not available, a Land Use and Management Log, recording all changes in land use and management over the course of the contract

· Reference to historical maps, images or other sources

· Signed attestation from independent expert

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Guidance

For the purposes of the Code, peatlands are defined as those dominated by peat soils over 50 cm deep. This definition is used because it does not require peatland vegetation, which is important for heavily degraded sites that are to be restored. The depth of soil threshold is consistent with the definition of peat soils in England and Wales and used in the Woodland Carbon Code, however this depth will be reviewed during the pilot phase. Soil type and depth may be inferred initially from the National Soil Map of England and Wales (NATMAP) (see http://www.landis.org.uk/data/natmap.cfm), Soil Survey of Scotland 1:250 000 soil database and maps from James Hutton Institute (Scotland), or the Soil Survey of Northern Ireland map (held by AFBI). However, questions remain over their accuracy at the required scale, so to ensure projects are taking place on appropriate soils, a peat core survey is required to validate these maps, and demonstrate an average peat depth of at least 50 cm. Peatlands may be active (where peat is currently forming and accumulating or supports peat forming vegetation but is not currently laying down peat) or inactive (currently lacking in peat forming vegetation). Soil may or may not be currently covered by peat forming vegetation such as Sphagnum moss. For the purposes of the Code, peatlands include sites were peat deposits have been partially lost due to human activities (e.g. previous peat extraction, human-induced peatslides, wildfire, severe erosion exacerbated by overgrazing, pollution, burning, or agricultural wastage of peat), but that can feasibly be safeguarded and/or restored to active building peat bog status. On damaged peatland, restoration returns the conditions necessary for long term retention of semi-natural peatland vegetation cover, with its typical species and habitats, reducing or halting carbon loss and allows peat accumulation to take place again, over the long-term. Restoration management may range from slight adjustments, such as reducing grazing and managed burning levels, to more substantial works such as rewetting to elevate the average annual water table through ditch blocking in formerly drained sites, or stabilising peat through re-vegetation of bare eroding peat. For more information about types of restoration allowed under the Code, see section 4.2 and best practice peatland restoration guidance (in prep.). It will be necessary to identify the former management practices that led to degradation, so that management under restoration can be compared to these baseline management practices and future management can be devised to ensure restoration is supported. See means of verification above for methods to identify this management baseline. !

2.3 Eligible land

Requirement

Land owner(s) (and where relevant tenants) to be able to enter a contract over the project area for the duration of the project. !Means of verification

· Declaration in Project Design Document detailing nature and location of ownership or tenure documentation and landlords consent · Solicitor or chartered surveyor’s letter · Title deeds · Land registry records

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· Copy of lease (if leasehold) certified by solicitor or chartered surveyor

Guidance

Projects are required to demonstrate legal ownership (or tenure and consent from landowner) of the project area for the duration of the project. One way of proving ownership is by accessing title registers and plans in the land registry, if the project area is registered10. Other suitable forms of evidence of ownership include title deeds or a solicitor or chartered surveyor’s letter. If the land is leased then a certified copy of the lease is required (by solicitor or chartered surveyor).

Projects shall identify any other parties who have rights of: · Access (defined as the right to enter the area for purposes that do not damage

or in any way detract or subtract from the site e.g. walkers) · Withdrawal (defined as the right to obtain resources from the site e.g. fishing

and other sporting rights, grazing, rights of turbary, water abstraction or mineral abstraction rights) · Management (defined as the right to regulate/alter patterns of use and

management of resources within the site) · Exclusion (defined as the right to determine who has access and withdrawal

rights) · Alientation (defined as the right to sell or lease access, withdrawal,

management and/or exclusion rights to the site) · Mortgagees or other holders of security over the land · Other legal and equitable interests in the land

Those who hold such rights or their representatives shall be consulted about any proposed restoration scheme, and where necessary, proposals shall be advanced as part of the Project Design Document to minimise or mitigate negative impacts on these rights-holders (see section 3.3). Where land is held under communal tenure, projects must demonstrate that all commoners with withdrawal rights have been consulted.

Projects should ensure that Environmental Impact Assessments are carried out prior to restoration commencing, where this is legally necessary. For example, an EIA would be necessary if: i) the project would lead to a change in broad type of land use (e.g. no longer agricultural land); ii) the project includes construction of a permanent development (including large dams or bunds to impound water in some lowland peatlands, where bunds would require an EIA); or iii) where agricultural operations are intended to intensify agriculture on unimproved or seminatural habitats (normally, peat restoration does the opposite). EIAs may apply in both designated and undesignated areas, but in designated areas any development is more restricted since it cannot be allowed to affect the interest feature adversely

To ensure security of tenure, agreements shall where possible be made with freeholders. Where freeholders are the trustees of private trusts (e.g. some large estates), there may be limits on the length of contract that can be entered. Where relevant, further separate agreements may then be negotiated with the occupier. These may be enforced through future tenancy agreements by including the terms in the agreement itself. It should however be noted that enforcing terms under future tenancy agreements may be difficult under old style Agricultural Holdings Act tenancy agreements, which give tenants wider freedoms.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!10 The relevant land registries can be accessed here: Land Registry (England and Wales); Registers of Scotland; The Land Registry Northern Ireland.

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2.4 Compliance with the law

Requirement

Projects shall make a declaration that they will comply with the law, with respect to project activities and cross-compliance with other relevant legislation that may be affected by project activities. The certification body will verify that there is no evidence of non-compliance with the law.

Means of verification

· Statements in Project Design Document · Project Design Document outlines a system or procedures for being aware of

and implementing requirements of new legislation · No evidence of non-compliance with the law

Guidance

Certification is not a legal compliance audit. The certification body will be checking that there is no evidence of non-compliance with relevant legal requirements, including:

· Managers and employees understand and comply with all legal requirements relevant to their responsibilities;

· All documentation, including procedures, work instructions and contracts, meet legal requirements;

· No issues of legal non-compliance are raised by regulatory authorities or other interested parties during the consultation phase (see section 3.3) of a project.

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2.6 Additionality

Requirement

Additionality shall be demonstrated through the following tests. Test 1 and Test 2 plus ONE OF Test 3 or Test 4 must be passed to ensure additionality:

1. Legal test: There is no legal order specifying that peatland should be restored

2. Contribution of peatland restoration sponsorship test: private sponsorship shall cover at least 15% of the restoration costs (which may include capital works, management costs and income foregone)

3. Investment test: Projects shall demonstrate that without peatland restoration finance the peatland restoration project is either not the most economically or financially attractive for that area of land or is not economically or financially viable on that land at all

4. Barrier test: Existing barriers to the implementation of the project have been overcome. Barriers could be legal, practical, social, economic or environmental

Means of verification

· Statements in Project Design Document · Analysis of the actual restoration costs and the proportion covered by private

sponsorship · A full financial analysis (including expected costs and revenues) of the funds

required to implement and manage for the project duration · Further evidence to support barrier test if used

Guidance

The concept of “additionality” is that projects should fundamentally seek to obtain an environmental benefit that would not have otherwise occurred.

In practice this means finance via the Peatland Code should enable a peatland restoration project to occur where otherwise it wouldn’t have occurred. There are a number of criteria that need to be met in order for a project to demonstrate its ‘additionality’: the legal test, contribution of peatland restoration sponsorship test, investment test and barrier test.

Legal Test

The project would not be considered additional if there is a pre-existing legal order specifying that peatland should be restored (e.g. planning conditions). Restoration is considered additional on sites with conservation designations (e.g. Sites of Special Scientific Interest and Natura 2000 sites), where there are objectives to restore peatland, but where sufficient finance has hitherto been unavailable to achieve these objectives (whether privately or via agri-environment schemes), and where there are no statutory orders requiring action e.g. nature conservation orders under legislative Acts.

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Contribution of Peatland Restoration Sponsorship Test:

An initial threshold for the contribution of private sponsorship towards the costs of peatland restoration has been set at 15% of project costs, to allow future flexibility.

Projects receiving grant aid under a government-funded initiative (e.g. agri-environment schemes such as Entry Level Stewardship or Higher Level Stewardship) are eligible provided at least 15% of the project costs are from private sources (and other additionality tests are met). Although agri-environment funding can only cover the costs of restoration and income foregone, it is possible for private finance to contribute towards other costs to make the project viable, for example including ongoing maintenance and monitoring. Where peatland restoration is partly funded by Government and partly funded through private sponsorship, it may not be possible to trade these GHG emission reductions on voluntary carbon markets or include them in corporate carbon accounting – sponsors should consult the rules of these schemes to assess whether they are likely to be eligible for inclusion.

Investment test:

Projects shall demonstrate that without carbon finance the peatland restoration project is either not the most economically or financially attractive for that area of land or is not economically or financially viable on that land at all. Alternative land uses that may compete with the objective of peatland restoration include rotational burning for grouse shooting and intensive agriculture. These land uses may provide a greater financial return than peatland restoration.

Barrier test:

Existing barriers to the implementation of the project have been overcome. Barriers could be social, economic or environmental. Barriers to peatland restoration may include;

· Lack of community buy-in

· Inaccessibility

· Lack of skilled labour and inputs

· Insufficient finance to meet up front costs

Projects should clearly set out in the Project Design Document whether this test is being used and describe the barriers and how they have been overcome. Supporting evidence (for example, from a bank if financial) will be required to substantiate the use of this test.

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3. Project governance This section offers guidance for the correct management of the project:

· In order to avoid double counting of carbon benefits, the project shall be registered via the Peatland Code Project Registry when this becomes available · Risks shall be managed so that GHG emissions are reduced over the longer-

term, with no leakage11 effects · Consultation shall take place with stakeholders in proposed projects

Principle

Projects need an effective and transparent governance structure with clear lines of accountability to enable cost-effective verification and to build confidence with stakeholders in order to ensure:

· Carbon benefits are not double-counted

· Risks are adequately managed to sustain GHG emission savings from the restored peatland over the long-term

· Relevant stakeholder are consulted about proposed projects

3.1 Registry and avoidance of double counting

Requirement

Details of the project and the land to be restored shall be registered on the Register of UK Peatland Code Projects, when this becomes available. In the first instance, this will be a project registry, held by IUCN UK Peatland Programme. In later phases of the Code, a credit registry will also be created, which will probably be held by a private sector registry supplier.

Means of verification

Land area is recorded on the Register of UK Peatland Code Projects.

Guidance

The Register of UK Peatland Code Projects is not yet available.

Double-counting occurs when the same tonne of CO2 equivalents is claimed by two separate entities, or in later phases of the Code if the same tonne of carbon dioxide were to be sold more than once. To avoid double counting there is a need for each project, and the buyers of its carbon to be recorded in a central registry.

The registry ensures transparency and also acts as a platform to bring buyers and sellers together. Key benefits of the registry are:

· Documentation can be publicly viewable, increasing transparency and confidence and helping to attract buyers

· The buyers of carbon at each individual project can be identified, ensuring that buyers claims are verified, and that carbon has not been sold more than once.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!11 For a definition of “leakage” see glossary

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3.2 Management of risks and permanency

Requirement

The project land owner(s) shall commit to maintain the project area as a permanent peatland area and maintain agreed vegetation cover and water levels. The Project shall demonstrate the commitment to permanence by:

· Identifying risk factors and developing appropriate mitigation strategies

· Assessing the level of risk according to climate, ownership, user rights, hydrologic connectivity, technical capability, current and future opportunity costs, endorsement of local population (see section 3.6), and national authorities etc.

· Managing as per the longer-term management intentions for the project duration and beyond

· Creating buffers proportional to the level of perceived risk, to mitigate against future losses or unrealized gains

Means of verification

· Risk Assessment

· Further evidence to confirm assessment of risk

· Subtraction of carbon buffer in project carbon calculations

· Evidence of contracts requiring continued implementation of the Project Design Document by the land manager and requiring the landowner to inform future owners of the commitment to the Peatland Code and to seek ongoing commitment on a change of ownership or occupation

· Practical evidence of the project developer demonstrating sensitivity to risk factors

· Field observations confirming that assessment of risk is reasonable

· Summary of consultation responses and mitigation measures (see section 3.3)

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Guidance

Permanence describes the issue of ensuring Greenhouse Gas emission reductions is permanent, and not reversed at a future point in time. For the purposes of the code, permanence is defined as the prevention of GHG emission savings as a result of project activities from being re-released to the atmosphere indefinitely. However, actual reversals of GHG emission savings will only be assessed over the contract period. Peatland projects carry a risk of reversibility if management interventions undertaken as part of a project are reversed in future, and as such safeguards must be in place to minimise that risk and to guarantee replacement or compensatory peatland restoration should a reversal occur during the contract period.

In England and Wales, Conservation Covenants may soon be used to allow long-term management agreements to follow any future sale of the property. For more information see: lawcommission.justice.gov.uk/areas/conservation-covenants.htm. In an update in August 2013, the Law Commission announced it would be going ahead with a draft timetable to legislation, and noted the strong demand expressed during the consultation for “providing assurance that conservation activity will be undertaken in return for payments for eco-system services”. In Scotland, a covenant would be secured from the current landowner not to part with ownership without securing a similar covenant with the new owner (or providing an equivalent area of new peatland restoration that is likely to secure a similar level of GHG abatement on a degraded but previously unrestored site). Advice should be taken on equivalent proceedures in Northern Ireland.

Risk management shall be built in at every stage of project design. The size of the risk buffer shall be determined using the risk assessment guidance below and specified. Risk of non-permanence beyond the project period will be assessed with proposals made to mitigate risks where possible and buffer size adjusted accordingly. These risks may be broken down into internal risks, external risks and natural risks as follows, and should be identified, with relevant mitigation measures identified as required.

Internal risks to the project include:

· Project management risks such as lack of qualified personnel to undertake the restoration work, issues over enforcing property rights, and inappropriate selection of management techniques

· Financial risks such as a lack of sufficient funds to meet all project costs (capital, maintenance and transaction costs) and significant opportunity costs

· Project longevity which relates to the risk that agreements are not in place for the duration of the project lifecycle

External risks to the project relate to:

· Land tenure and resource access/impacts relating to the threat that competing uses of land can have to the restoration project. For example, public access may cause erosion and peatland degradation

· Impact of changing land use e.g. tree planting or drainage on adjacent land within the same hydrological unit

· Impact of fencing to exclude deer, resulting in changed patterns of movement which may affect a restoration site

· Changes in rates of atmospheric deposition of pollutants leading to habitat damage and change in species composition

· Lack of community ‘buy-in’ to the project · Negative impacts on adjacent land-holdings

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Natural risks to the project relate to:

· Wildfire · Pest and disease outbreaks among peat-forming plant species · Extreme weather · Climate change, in particular the predicted increased incidence and severity of

summer droughts · Geological risk including slope-failure, mass movements/peat slides

Each project is required to undertake a risk assessment in line with these criteria, for example employing qualified (e.g. RICS or CAAV accredited) Chartered Surveyors and Agricultural Valuers to assess the risk of negative impacts on adjacent land-holdings. Projects that are deemed at greater risk than others are required to put in place a larger ‘GHG emission reduction buffer’. For example, projects where risks of drought and wildfire are greatest (due to predicted climate change and visitor numbers) are likely to require larger buffers than many wetter and less visited sites. More detailed guidance (and where relevant metrics) for risk assessment will be developed as part of the pilot phase of Code operation.

Risks shall be re-assessed within 5 years of validation and thereafter within at least 10 yearly intervals (when monitoring is conducted), and buffer sizes adjusted accordingly. To ensure permanence, buffers may be shared between different projects at the discretion of the accrediting body. In this way, GHG emission reductions may be taken from projects that achieve more GHG emission reductions than they intended, whose buffer size is reduced at mid-term review or who do not require their buffer, and given to projects that need to increase the size of their buffer, fail to realise intended GHG emission reductions or that lose GHG emission reductions, for example due to catastrophic events.

The buffer is defined as ‘a pool of unclaimed GHG emission reductions’ to cover either uncertainty in GHG measurement or unavoidable potential losses which may occur from the project over time, thus ensuring the permanence of GHG emission reductions.

A number of catastrophic events (i.e. “force majeure”) that cannot be foreseen (such as war and natural disasters) and that would be outside the control of the project, could affect GHG emissions with or without the project, and are not expected to be buffered against.

Contract-related disputes are a matter for the courts rather than for the body that will run the UK Peatland Code. However, it is expected that if restoration is not delivered through the fault of the project, non-compliance with the contract to deliver restoration should first be dealt with via arbitration (or disputes clauses within contracts). Ultimately recourse may be to the courts, with the potential for lawsuits to be brought against sellers by buyers. Where necessary GHG emission reductions from the pooled buffer (generated across multiple projects) may be used to meet commitments, with GHG abatement credits cancelled, the seller being decertified and forbidden from using the Peatland Code in future unless they deliver their commitments. Alternative for example, sellers may provide an equivalent area of new peatland restoration that is likely to secure a similar level of GHG abatement on a degraded but previously unrestored site, to meet their commitments. 3.3 !Consultation

Requirement

Projects shall consult those with tenure rights over the land proposed for the project (including those with rights of access, and an opportunity for the public to provide views), or their representatives, and statutory conservation and water bodies, and make proposals to mitigate any negative impacts of the project on rights holders (as defined in section 2.3).

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Means of verification

· Evidence in Project Design Document that those with rights of access, withdrawal, management, use, exclusion and alienation have been identified and where relevant consulted, and reasonable attempts have been made to mitigate against negative impacts from the project on the interests of these rights holders, which may include suitable compensation measures for the loss of, or interference with, rights of ‘quiet enjoyment’

Guidance

See guidance notes for section 2.3 for definitions of rights holders.

Projects shall demonstrate that all reasonable attempts have been made to contact rights holders or their representatives, including active attempts to trace and make contact via appropriate means of communication. At minimum, this would normally be a sign on site or at on a nearby public right of way for more remote sites, a notice in a local paper and a letter to owners of adjacent properties, where these can be identified.

Project proposals shall be available to all likely consultees (including those without internet access) for a minimum of 8 weeks.

It is accepted that it will not be possible to mitigate all negative consequences for all rights holders, however, all objections shall be listed and addressed, and reasons given where it is not possible to mitigate against them.

3.4 !!!Group schemes

Given the complexity of effectively setting up and managing group schemes where multiple sellers offer ecosystem services across property boundaries, these are not permitted during the Pilot Phase, but guidance will be prepared for later phases of the Code to permit such activities.

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4. Project documentation

This section offers guidance on how to document and report on the project:

· The Project Design Document (PDD) and the Management Plan aim to provide a clear and effective governance structure with clear lines of accountability. Processes and activities shall be clearly documented to allow time- and cost-effective verification · There shall be a well designed management plan and evidence that there is

sufficient management capacity for the proposed project · Claims about carbon shall be clear and accurate and reported on a regular

basis, using the Peatland Code logo Principle

Projects need to be clearly documented with effective reporting processes to ensure:

· All aspects of project design are clearly documented

· There are effective management plans in place to deliver projects

· Claims about carbon are clear, conservative and accurate

4.1 Project design documentation

Requirement

A. Description of the proposed project and original conditions in the project area, including: · the project title; · its objectives and activities; · its location and project boundary, including geographical information and physical

descriptions; · the organisations and individuals involved, including roles and responsibilities in the

project and contact information; · an indication of whether the project site covers statutory designations (i.e. SSSI, SAC,

SPA, LNR), and whether this places constraints on the project design or raises additionality issues.

B. Duration of project activity C. Methodology: application of baseline, measurement and monitoring methodology, including: · leakage assessment, with relevant mitigation strategy; · estimation of emissions reductions to be generated over the chosen period. D. Additionality assessment E. Long-term management plan F. Monitoring plan outlining how performance will be monitored, including: · a chronological plan showing when monitoring will be undertaken; · the performance indicators/targets that will be used; and

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G. Environmental impacts of the proposed project activity, as outlined in any ES or EIA process to which the project has been subjected, or an “appropriate assessment” for sites designated under the Habitats Directive. H. Socio-economic impacts of the proposed project activity, including a brief description of communities located around the project area, as outlined in any ES or EIA process to which the project has been subjected, and reporting and responding to the findings of any consultation carried out with local stakeholders. Means of verification

· Project Design Document

· Boundary map showing areas to be restored

· Map showing any designated areas

Guidance

The area covered by the project shall be clearly defined using appropriate maps, identifying all relevant aspects of the peatland resource, including any special characteristics and/or sensitive areas, and areas to be restored.

A template PDD is available on request, and is being further developed and refined during the pilot phase of Code operation.

4.2 Management plan and capacity

Requirement

There shall be a detailed management plan for the project containing:

· An outline of the necessary inputs and resources

· A summary of restoration and maintenance techniques over the full contract duration, ensuring these adhere to known good practice (as contained in good practice guidance – under preparation by IUCN UK Peatland Programme, John Muir Trust and Yorkshire Wildlife Trust)

· A chronological plan for initiation of key project activities

· Full financial analysis providing for maintenance and monitoring over the full contract duration

· Statement on risks and contingencies

There shall be an outline of the longer-term management intentions, for the project duration and beyond.

The project developer shall have the management capacity necessary to carry out the planned project activities for the duration of the project.

Means of verification

· Contract between project parties or statement from landowner sets out longer-term management intentions (including the peatland management regime to be applied)

· Project Design Document which clearly defines how roles in the project will be fulfilled

· Project team lists which identify key technical skills

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· Evidence from previous project experience

Guidance

Restoration and maintenance techniques

Where relevant, each of the following steps are normally expected to be taken during peatland restoration under the Code:

· Reduce/prevent disturbance (e.g. livestock management to reduce grazing/trampling impacts, and fire reduction or prevention – both managed and ‘accidental’)

· Stabilize bare peat (e.g. nurse crops, brash/ geojute)

· Water table management (grip/gully blocking using permeable and non-permeable material depending on objective, possibly reprofiling)

· Vegetation and biodiversity management (seeding/propagation/planting; heather cutting, tree and scrub removal).

Good practice in peatland restoration must be followed, as detailed and regularly updated in the good practice guidance – under preparation by IUCN UK Peatland Programme, John Muir Trust and Yorkshire Wildlife Trust.

Vegetation and diversity management may include removal of woodlands from peatlands12.

The following restoration techniques are not compliant with the Peatland Code:

· Projects that entirely consist of the relocation of peat from one site to another – there is no evidence that carbon will be retained and become an active peat bog

Activities that may be included at a later date:

· The possibility of including projects in future that seek to avoid peat extraction/peat mining at a specific site will be explored during the pilot phase

· Restoration of fen and raised bog habitats

Chronological plan for initiation of key project activities

A chronological plan shall be put together to illustrate the timetable for peatland restoration and the timing of various capital works, maintenance works, monitoring and verification.

Full financial analysis providing for maintenance over the full contract duration

Financial analysis shall set out the costs incurred to the project and the expected timing of those costs over the project lifecycle.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!12 Removal of scrub and/or forestry on peatland should be in line with the UK Forestry Standard and the UK Woodland Assurance Standard. For England, see also the Forestry Commission policy on restoration of open habitats and for Scotland, see Forestry Commission policy on woodland removal. Wales does not have a specific document about its woodland removal policy. However its policy is set out out in Woodlands for Wales the Welsh Government's (WG) woodland strategy: http://www.forestry.gov.uk/pdf/EnglishWfWstrategy.pdf/$FILE/EnglishWfWstrategy.pdf

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4.3 Carbon statements and reporting

Requirement

Under the Pilot Phase of this Code it will be possible for sponsors to make statements about the emissions savings they have paid for. However, under the Pilot Phase of the Code, it is not acceptable to use climate benefits in formal corporate carbon accounting or for any offsetting purpose at this stage. It will only be possible to report GHG emissions savings after they have been verified, and it will only be possible to count verified emissions savings towards corporate carbon accounting if this becomes possible via formal reporting mechanisms (e.g. DEFRA Greenhouse Gas Reporting Guidelines), if the use of emissions savings in corporate carbon accounting is approved in a future iteration of the Peatland Code (a decision which would be taken by the Code’s Steering Group) and all parties to relevant contracts are content for this to happen (e.g. landowners). Similarly, trading the GHG emission savings on the voluntary carbon market would only be possible if this were allowed in a future iteration of the Code and all parties were agreeable, assuming the relevant standards can be met for this market (e.g. Verified Carbon Standard). Emissions savings cannot be used in corporate carbon accounting or traded in any way during the Pilot Phase or for as long as the Peatland Code prohibits these activities. Statements made via any channel (e.g., formal reporting, press releases) prior to emissions savings being made shall clearly state the timescale over which emissions are to be saved. Net emissions savings of a project shall be calculated as project emissions savings adjusted for the baseline and leakage. Documentation shall show the predicted net carbon flux at 5-yearly intervals for the duration of the project.

The legal rights of all parties to claim or report the climate benefits of the project shall be clearly stated in the Project Design Document. Any changes to ownership of the carbon shall be documented and updated in the Register of UK Peatland Code Projects. Means of verification

· Statement of claims in Project Design Document.

· Record in the UK Register of Peatland Code Projects.

· Contract(s) between landowner, carbon company/agent and sponsor state(s) each parties’ legal right to claim or report the carbon benefits of the project.

· Signed attestation from each party to the project regarding the agreed approach to carbon statements or reports.

Guidance

A carbon statement is simply a statement of what a project will store or has stored to date. It can be restated by more than one party with an interest in a project.

Anyone making carbon or other environmental claims should also refer to Defra’s Green Claims Guidance.

4.4 Peatland Code logo

Requirement

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Certified projects may use the Peatland Code logo and shall do so in accordance with the Rules of Use, which will be published once the logo is registered as a Trademark (currently pending). Means of verification

· Examples of appropriate use

· No evidence of misuse

5. Monitoring climate and other benefits There shall be an effective monitoring scheme with baseline assessment of vegetation and water table depth put in place providing up to date information on the progress of the project towards climate mitigation goals. Peatland restoration also has the potential to provide many benefits in conjunction with reducing GHG emissions. These shall be identified and encouraged. Negative side effects shall also be identified and prevented where possible. It is expected that finance for monitoring will be built into the costs of restoring peatland over the course of the contract. Principles

Effective monitoring gives up to date information on the project’s progress towards climate mitigation goals.

Peatland restoration has a range of co-benefits, including improved water quality, aesthetic and accessibility benefits for recreation, and biodiversity gains. Projects need to be of high environmental quality, taking into account the wider impacts on ecosystems to ensure that no harm is done by the project and, whenever possible, that wider benefits are created.

5.1 Establishing a carbon baseline

Requirement

Projects shall establish a baseline against which changes in GHG emissions and other ecosystem services can be measured. A net GHG emission baseline is the reference level of GHG flux from which the impact of the project can be measured. In addition to this, projects shall describe the original condition of the project site including details of the vegetation cover, soil type (including peat depth) and the estimated carbon content of the soil.

Means of verification

• For site description, appropriate maps, photographs or remotely sensed images to indicate previous land cover; results of field survey for vegetation (using National Vegetation Classification) or soil survey for soil type.

• For baseline calculations, carbon baseline calculations in Project Design Document.

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Guidance

The baseline shall be based on a continuation of the current land use in the absence of the project and is calculated at the start point using vegetation proxy methods, or on the basis of at least 5 years previous direct measurements. Where land is cleared of trees or other vegetation in preparation for the project start date, the lost carbon stock shall be calculated and subtracted from the project GHG emission reductions at year 1.

More detailed methods for calculating baselines are available as part of the VCS methodology for peatland rewetting, available here: http://v-c-s.org/sites/v-c-s.org/files/PRC%20RDP%20GEST%20methodology.pdf

5.2 GHG leakage

Requirement

Confirmation shall be given as to whether the land manager intends to change or intensify the use of land elsewhere as a consequence of the peatland restoration.

If leakage (landuse change / intensification) does occur within the UK then projects need to carry out an assessment to determine whether this will result in GHG emissions.

If significant GHG emissions occur they shall be quantified for the duration of the project and will be used to reduce the overall net climate benefit claimed by the project.

Means of verification

· Statement in Project Design Document of intention by the owner/applicant to replace the previous land use or activity elsewhere

· Leakage assessment in Project Design Document

· Mapping or field observation of current land uses within the project boundary and the likelihood of displacement of activities

· Further calculations of leakage

Guidance

Leakage is GHG emissions outside the project boundary as a result of the project (e.g. displacement of agricultural activities might result in drainage of peatlands elsewhere).

Leakage is significant if it results in GHG emissions of magnitude ≥5% of the project carbon storage over the duration of the project. Restoration of peatlands in one area may lead to degradation of peatlands or other habitats in other areas.

The potential for leakage shall be identified, and projects are encouraged to include leakage management zones as part of the overall project design. Leakage management zones can minimize the displacement of land use activities to areas outside the project area by maintaining the production of goods and services, such as agricultural products, within areas under the control of the project proponent or by addressing the socio-economic factors that drive land use change.

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5.3 !Monitoring climate benefits

Requirement

The project shall have a monitoring plan in place before the project begins, to quantify and document the progress of GHG emission reductions as a result of the project. Monitoring plans shall be properly costed (bearing in mind relevant discount rates) for the contracted period and built into the project costs.

Monitoring plans need to be set out in the Project Design Document, carried out at regular intervals (see guidance below), assessed by independent bodies, and adapted to improved scientific evidence on an ongoing basis. Relevant Government agencies/departments will be able to provide up-to-date guidance on biodiversity monitoring (Natural England, Scottish Natural Heritage, Natural Resources Wales and DARNI).

Regular monitoring of projects shall take place to demonstrate GHG fluxes are consistent with those identified in the Project Design Document (see guidance below). Projects are expected to determine GHG flux changes using vegetation-based proxies, but may alternatively use direct measurements or model-based approaches where appropriately validated and calibrated to site conditions (see guidance note).

Corrective actions shall be undertaken if water table levels or vegetation changes do not meet expectations. The carbon monitoring plan shall include details of:

· The carbon baseline

· The assessment protocol(s) to be used

· The frequency of monitoring

· The sampling frequency/no of sample plots

· How the data will be reported and quality assured

Means of verification

· Monitoring plans set out in the Project Design Document

· GHG monitoring reports which show progress in reduction in GHG emissions

· Review by independent bodies

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Guidance

GHG emission reductions shall be measured and expressed in tonnes of carbon dioxide equivalent (tCO2e). Monitoring and verification shall first take place in the first year following restoration (to demonstrate that the work has been done), at some point 1-5 years after validation, and thereafter at periods of 10 years (or less). Monitoring is a necessary step to assess how successful restoration and management activities have been in achieving objectives, goals or targets. For each ecosystem attribute, a clearly defined set of objectives for particular time periods need to be established.

Verification of the climate benefits of restoration shall be undertaken by an accredited body and will assess the GHG balance of the peatlands after restoration, projected to the end of the contract period, compared to the baseline (reference) scenario. The verification will also ensure that the peatland is being managed in accordance with best practice according to the good practice guidance (in preparation by IUCN UK Peatland Programme, John Muir Trust and Yorkshire Wildlife Trust).

Although it is expected that most projects will do this through vegetation proxies (see below), projects may also opt for direct empirical measurements (following an appropriately designed sampling strategy, with sufficient sample density and time intervals, reporting at least every 10 years, to represent changes across the site) using eddy covariance techniques (via flux towers) or closed chamber methods. Vegetation proxy methods are appropriate for calculating GHG fluxes from all forms of restoration described in section 4.2, however they are not currently adapted to account for emissions savings from forestry removal. More detailed guidance for monitoring GHG emission reductions associated with tree removal will be provided in later phases of Code development.

Changes to the reference condition should be monitored through tracking the GHG flux measurements or tracking changes in the vegetation proxies and the condition of the peatland. GHG emissions from drained peat, litter and ground vegetation are estimated based on the presence of GHG Emission Site Types (GESTs) with calibrated GHG emission profiles. Preliminary GESTs for UK peatlands have been published by Natural England and Defra here. These will be further tested and refined in pilot projects during the Pilot Phase of the Peatland Code, in order to develop a protocol that can be applied across all UK peatlands for future phases of the Code and integrated into the Project Design Document.

In summary, following this approach indicator species or functional indicators (such as water table or bare peat area) within peatland ecosystems can be used to assess the condition of a peatland and can be used as a proxy for changes in GHG emissions from peatland. Vegetation proxies can be used to assess the condition of the peatland and this can be translated into a carbon metric, expressed as either emitting or sequestering X tonnes of CO2e per hectare.

The GEST method has been successfully developed to cost-effectively monitor GHG flux changes from Central European peatlands, and a methodology based on the GEST approach has been approved by the Verified Carbon Standard for use in international voluntary carbon markets. Further work was commissioned by Natural England and DEFRA to adapt this approach to the vegetation assemblages found in UK blanket bogs in 2012/13. From this work, a number of GESTs have been determined for UK peatlands.

Using the GEST approach, the pre-project spatial distribution of GESTs is first calculated. Where the site contains a range of habitats, it is divided into sections and relevant GESTs are identified for each strata. Next, a time series of GESTs are developed for each stratum for the entire project’s contract period, and annual GHG emissions can be calculated per stratum for the project’s contract period.

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5.4 Co-benefits

Requirement

The project shall set out the effects that it anticipates on a full a range of ecosystem services as possible and, where appropriate, include actions to enhance the co-benefits and/or minimise unnecessary trade-offs.

Means of verification

· Environmental Quality statements in Project Design Document

· Environmental Impact Assessment/Environmental Statement or confirmation that EIA is not required

· Other relevant documentation

Guidance

Peatland restoration has a range of substantial co-benefits, including biodiversity gains, improved water quality, and aesthetic and accessibility benefits for recreation. As well as synergies with other ecosystem services, there are some risks that peatland restoration may lead to certain undesirable trade-offs, which may need to be minimised through proactive land management planning, either via mitigation measures or additional payments to compensate for lost income (e.g. where restoration requires reducing the intensity of livestock grazing). Basic peatland restoration can also provide a foundation for other biodiversity creation or restoration projects and, where this land management is additional to the peatland restoration such management could access other income streams

All projects shall therefore need to be able to show that any environmental impacts on the land area concerned are likely to be positive. Where required, the content of an Environmental Statement and the requirements of the Environmental Impact Assessment process will usually cover all issues associated with environmental integrity.

Where an EIA is not required, effects on a range of ecosystem services shall be reported where possible, in particular focusing on peatland biodiversity. Habitat type and some aspects of condition may be inferred from vegetation monitoring used as part of the GEST approach (above), however collection of additional data (e.g. indicator species) may be required to adequately assess effects on biodiversity. This may for example include basic bird and invertebrate surveys, but this is not mandatory under the Pilot Phase of the Code.

Any other effects on the provision of ecosystem services from the site that can be monitored cost-effectively are actively encouraged where possible e.g. aesthetic and access benefits via visitor surveys and water quality monitoring.

Where detailed monitoring of co-benefits is not possible, projects may create a narrative based on published evidence e.g. from Natural England’s Upland Evidence Review for the restoration of blanket bog (NEER003) (and more recent and/or site-specific evidence as appropriate) and include this in their Environmental Statement. Providing restoration sites are monitored for GHG emission savings (as per guidance in section 5.3), there is a robust evidence base for a range of co-benefits from successful restoration sites that may be claimed.

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Appendix!2:!Response!to!public!feedback!on!draft!Code! This appendix provides a copy of responses to the initial draft of the Peatland Code, which was made available for comment in June 2013. Individual responses have been anonymised, however, the full list of those who responded is given below. A total of 18 responses were received as follows:

• Andrew McBride – Scottish Natural Heritage • Dr Rob Field - RSPB • Ruth Welters – Natural Environment Research Council Valuing Nature Network • Scottish Natural Heritage official reply collated by Dr Patricia Bruneau • Woodland Carbon Code Steering group and Forestry Commission official reply

collated by Dr Vicky West • The Heather Trust official reply collated by Simon Thorp • David Leach – Somerset Wildlife Trust • Samantha Hagon – Lake District National Park Authority • Jonny Wildman – Dinsdale Moorland Services Ltd. • United Utilities – official reply collated by Edward Lawrence • Jillian Hoy – SFQC • Jane Lusardi – Natural England • Steve Chapman – James Hutton Institute • Claire Campbell – SEPA • Paul Sinnadurai – Beacons NPA • Royal Institute for Chartered Surveyors • Elan Valley Trust • Helen Dunn, Phil Earl and Colin Smith (DEFRA)

The business community was consulted via initial market research, and subsequently via meetings with members of the business community facilitated by Scotland’s 20:20 Climate Group, leading to the production of tailored information leaflets for this group. Draft responses to feedback are provided in red. These are provided in detail for questions 1 and 2, and in summary draft for later questions. Presentation of the Code 1. What are your views on the presentation and clarity of the Code? Is it pitched

appropriately for the intended audience? 1.1. Yes - although a few typos are lurking and the VCS weblink is broken Code document has been proof read and VCS weblink has been fixed 1.2 The draft Code is comprehensive, but it does take time to read and absorb . It often lack to wordy and not clear about its intended target audience. It would not be easily understood by ‘typical’ land managers, although agents acting on their behalf should manage. Template documentation would probably help as at first sight it does seem that the bureaucracy is quite onerous – and thus expensive. This could be off-putting. Leaflets explaining key elements of the code are being designed for buyers and sellers (this latter group would include land managers), which will be written in language that is accessible to each group. This will mean that the Code itself will primarily be read by intermediaries and others designing and running schemes under the Code, who we would expect to be able to deal with the technical nature of the document.

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1.3 The intended audience is not clear. An immediate concern is that the code is pitched in language that will be alien to anyone except those who have a good understanding of peatland. Therefore, this will exclude the vast majority of landowners and land managers who own & manage most of the peatlands. To reach these people, guidance that is easier to understand will be required. See answer to 1.2. 1.4 The document is well written and complex issues are explained with clarity. The overview provides some good arguments as to the benefits. However it is important not to over-sell any benefits and be completely clear what the outcomes of restoration will be – being clear about all parts of the jigsaw. There are areas needing more work and checking for consistency, but the similar structure to the Woodland Carbon Code will provide consistency of layout across the two standards which should reassure. It’s appropriately pitched for the audience – although you may well find you need additional guidance for each section. For the Woodland Carbon Code we have produced this on the website. The leaflets that are designed to explain the benefits/requirements for buyers and sellers will take care not to over-sell the benefits. These and the Code itself will be available online via the IUCN Peatland Programme website from September 2013. 1.5 If this document is aimed at potential sponsors then the opening paragraphs need to be simple and attention grabbing. In its current form potential sponsors will have to get to the ‘Why Peatlands’ section and the ‘What do I get as a sponsor’ sub headings of the main document for a simple explanation of why peat restoration is relevant to them. The document could be improved by a short introduction that explains the mechanism in very simple terms. This would summarise the first paragraph of the ‘Why peatlands’ section and the ‘What do I get as a sponsor’ section. It would also help to have a more inspiring description of peatlands, perhaps giving a couple of examples of iconic places. Some mention of visitor numbers would be relevant to sponsors. Natural England research suggests that the reserves of the Avalon Marshes attract 70000 visits a year. No, the code seems to be quite vague and interested parties could be left confused by the code as it is, this could be off putting to land owners, etc. For instance what is involved for the landowner and what he have to do. See response to 1.2 – this feedback is useful and will be used to shape the drafting and design of these targeted leaflets. 1.6 No, the code seems to be quite vague and interested parties could be left confused by the code as it is. This could be off putting to land owners ect. For instance, what is involved for the landowner what does he have to do. See response to 1.2 1.7 A Code is a defined standard of expected behaviours, but this reads as an outline of suggested scheme implementation. This point was also raised at the feedback meeting in London. The revised Code now attempts to distinguish more clearly between the Code itself and the pilot phase, which operates more in the mode of a project. 1.8 It doesn’t tell you the detail or implications of managing your peatland for carbon. We don’t feel that the Code is sufficiently clear. There is a lack of knowledge about peat and

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carbon from land owners and peatland managers. The significance of peat carbon storage and budgets needs to be simplified, explained and sold better. This will be done in the leaflet targeted at sellers. 1.9 What standard must the CB be UKAS accredited to? Assume ISO 14065, the same as Woodland Carbon Code. We are assuming this too, but are in discussions with UKAS, who will determine the most appropriate standard. 1.10 Why must the CB be registered with the Financial Conduct Authority? We have assumed that this will be necessary on the basis of advice given to the Woodland Carbon Code, but we are in discussions with UKAS who will advise us on this. 1.11 Please note that UKAS accreditation will still need to be achieved for the Peatland Code even if accredited CB’s are used. CB’s have to apply for extension to scopes for all new activities. We are in discussions with UKAS, and will go through the process of setting up accreditation during the pilot phase of the Peatland Code. 1.12 Quite technical/legal in some places but probably needs to be so. No response required. 1.13 The presentation of the Woodland Carbon Code is far more visually appealing, compared to the plain text format of the current version of the Peatland Carbon Code. It may be worthwhile to improve the visual appeal of the document to increase publicity and informal circulation of the Code. The Peatland Code will be put online with appropriate graphic design by September 2013 1.14 In terms of clarity and pitching it reads as if intended for readers who are already familiar with this type of project or activity. In particular, the term ‘leakage’ occurs several times (e.g. page 14) before finally been defined in the text on page 21, and fully defined on page 24. A footnote has been added the first time that the term “leakage” is used, referring readers to the glossary. In more general terms, leaflets for buyers and sellers explaining the Code in simpler terms will address the issue of familiarity raised in this comment. 2. Does the Code and the overview/flyer adequately make the case for peatland

restoration to potential investors? 2.1!YES No response required. 2.2 The overview and flyer make a adequate case for peatland restoration to potential investors but the flyer, in particular, needs to be more attractive and significantly shorten in length. The presentation of why peatland restoration is important’ and what the Code is all about are getting a bit entangled and as a consequence there is not a clear initial message in the flyer for someone new to the subject.

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For example, in the introduction section of the flyer introduction, the code is refer to as ‘a help to fund peatland restoration’. This might give the wrong first impression. One suggestion here could be to mirrored the woodland code to make it clearer from the onset about what the rational being the code, e.g. “ as a voluntary code will encourage a consistent approach to peatland restoration projects, and offer clarity and transparency to customers about the carbon and biodiversity savings that their contributions may realistically achieve” (or something similar). Both the flyer and the overview need to be illustrated and with fewer words if it is going to grab the attention of land managers and the investors alike. Land managers face lots of competing demands for their attention. How can we persuade them to take, or even consider, this option rather than, for example, a wind farm? The section “on what to I get as “ is useful but again a bit too long and dry. In the introduction section of the code, section 2.1 introduce the code as ‘providing … regulatory basis for peatland restoration’. Although the code could be seen as supporting government and agency work, it will be misleading to introduce it as a regulatory basis for peatland restoration to wider audiences. We have employed a communications specialist to re-write a much shorter version targeted at buyers and sellers – this will consist of a short leaflet (2 sides of A4 with lots of pictures) and a longer briefing note (4 sides of A4, less pictures). Both will incorporate professional graphic design and inspiring imagery. These more detailed comments (and those of others who have provided feedback to this question) have been sent to the specialist writing these leaflets to incorporate into the new text that is developed. 2.3 No, I do not think that a potential sponsor or landowner will be inspired by the wording of the flyer – it is too academic. A form of presentation & wording that will appeal to these separate and specialized audiences needs to be developed. The comments from Q1 apply. To attract investors the Code needs to be made accessible in Boardrooms. The paper prepared by HT & IUCN for the 2020 Climate Group in Scotland gets nearer to this. See response to 2.2 2.4 The document clearly describes ‘tangible’ benefits in language that investors would understand. It is important that statements are clear and precise. We felt that this ‘sales pitch’ section was perhaps not best placed at the start of the standard but might be something that appears as a separate document/leaflet – leaving the standard to simply state what is required of projects. This “sales pitch” was included at the start of the Code in order to get feedback, but the intention was always to turn this text into a stand-alone leaflet. In response to feedback, this will now be a series of leaflets of varying detail targeted at either buyers or sellers. 2.5 WCC: Within the overview/flyer and the rest of the document there is frequent reference to the UK Peatland Code operating in a similar manner to the Woodland Carbon Code. There are two differences it is important to point out. Firstly, given that the UK Peatland Code is still in the development phase and does not yet have all the elements in place it would be more precise to say the UK Peatland Code will, over time, operate in a similar manner to the Woodland Carbon Code. Secondly, it is important to point out the fundamental difference that the Woodland Carbon Code accounts for the net sequestration of carbon within the woodland (including biomass and soil) but does not account for the avoided emissions from the previous landuse, whereas the UK Peatland Code is accounting for the avoided, or reduced, emissions from the previous landuse and may over time account for sequestration if the project area becomes fully restored.

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General references stating that the Peatland Code will operate in a similar way to the WCC have now been removed in response to this comment, although a one specific reference to the use of Woodland Carbon Code certification bodies has been retained. 2.6 WCC: It would be good if the document could be clearer in ‘Why Peatlands’ about the role of regulation in preventing peatland degradation. It is not entirely clear what CSR investors, and especially investors in pilot projects will be able to ‘do’ with the carbon ‘credits’ that a project may generate if they cannot use or report them in any way. Would their claim simply involve the restoration of peatland rather than an amount of carbon emissions saved? This will be made clear in the revise text that is developed for leaflets. 2.7 WCC: Several places in the overview and later in the document appear to assume that all peatland would be restored to a state where it would again sequester carbon. We suggest that this will not always be the case and such statements should state ‘restoration … may result in bogs being returned to a sink status’ rather than ‘will’. It would also be helpful to clarify whether these statements account for all greenhouse gases (including methane). The only mention of the word “sink” in the Code is in relation to land owners committing to maintaining project areas as permanent carbon sinks (section 3.2). Given that this may not always be possible (e.g. due to climate change or other factors), this wording has been changed to say that they undertake to maintain them as permanent peatland areas with agreed vegetation cover and water levels. 2.8 While peatland restoration may be easier and quicker than some methods of climate change mitigation, it is arguably not the easiest. Energy conservation, for example, would be the more attainable and rapid method. No response required. 2.9 The overview states that intermediaries between the land manager and investor would have to be registered with the FCA. It would be helpful if this statement were clarified. Under the Woodland Carbon Code, we require someone who trades in carbon (i.e. buys carbon units with a view to selling them on) to be registered with the FCA but not a project developer who manages the project and brokers a deal between landowner and carbon buyer. This requirement has now been removed from the Code. 2.10 No, it all seems to be couched in language that is too academic. See response to 2.2 2.11 Again no. Potential investors are likely to have less knowledge than peatland owners/managers. The popular perception of carbon offsetting is planting trees. It needs to be explained as simply as that – with pictures. See response to 2.2 2.12 Longer contracts may be negotiated – negotiated with whom? There would need to be a process in place which would provide evidence regarding the decision to the CB. This was not meant to imply contract variations, rather that contracts over 100 years are in theory possible (there is no upper cap on length of contract) – this has been reworded to state that “longer contracts may be possible”.

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2.13 Do not feel [section 2.2] is worded in a clear way. Do not feel that [section 2.3] is auditable in its current form. The CB is auditing the peatland project not the investors in the project and certainly not the carbon footprint of the investors. The use of the word ‘should’ is not suitable from an auditing perspective – need to be specific. Section 2.2 has been re-worded to make this clearer. Section 2.3 has been removed from the Code. 2.14 In section 2.4, ‘Projects shall comply with the law..’, for auditing purposes CB could only verify that there is no evidence of non-compliance with the law/ project has declared that they will comply with the law. Statement might perhaps be amended to reflect this. The text has been amended accordingly. 2.15 [In section 2.6], has test 2 been tested, [and] is 15% an achievable amount? Why has a percentage of 15% been set? If it is just copying the WCC value need to think of an appropriate answer when projects ask why they must meet this arbitrary value. Barrier test can be very subjective hence their needs to be clear guidance surrounding it and it should be used only when absolutely necessary. Test 2 has not been tested yet, but will be tested during the pilot phase of the Peatland Code’s operation. 15% was selected to make the Peatland Code consistent with the WCC. We will seek advice from WCC re: the reasons they selected this figure. 2.16 The code by itself doesn’t make the case. See response to 2.2 2.17 Yes, but improve visual presentation. See response to 2.2 2.18 I recommend that opportunities to invest in local capacity building should not be limited to the Prince’s Countryside Fund because this is just one of many similar funds and local initiatives. For example, every National Park Authority in Britain, and every Board for each of the Areas of Outstanding Natural Beauty in Wales and England, each offer a Sustainable Development Fund for similar initiatives. In the Brecon Beacons National Park for example, this fund amounts to £200,000 per year of grant support to relevant causes; we are currently exploring options for this to be made available as an investment fund too. There will be other relevant capacity-building projects too, which are run under grant support from e.g., Heritage Lottery Fund, Entrusts, Aggregates Levy Sustainability Fund and so on. For example, the Brecon Beacons National Park Authority has recently been awarded £900,000 under the HLF Future Skills Fund to provide training each year for six trainee wardens. We are also, slowly, developing a partnership that may lead to a HLF Landscape Partnership Project, potentially involving several £millions, for an integrated conservation programme for the Black Mountains. This would include capacity building and skills development as well as peat-based habitat conservation. We have discussed with Paul Sinnadurai (Conservation Manager, Brecon Beacons National Park Authority) how best to deal with this concern, and suggest offering a menu of opportunities via the IUCN UK Peatland Programme’s website for the Peatland Code, whilst making it clear that investors can make their own arrangements beyond this menu. It would

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be useful if there were some way of tracking the level of sponsorship that is delivered via this route. 2.19 Onsite branding may go down like a lead balloon; most upland moorland, where most of the peat-based carbon is stored, is in private ownership and a lot of it is on registered common land. All of this land will also be Access Land, for which an increasing range of recreation demands are also made. Branding might prove to be unpopular with the landowners, tenant farmers, commons graziers and the wider public. Landowners, tenants and graziers would also not want to feel constrained by brand demands. We agree that this will not be an option for many sites, but it may be possible for some sites. We have therefore amended the wording to say “there are may be on-site branding opportunities with some projects”. However this wording is contained in the overview, which will be re-written by a communications specialist, and there is a chance that during the process of shortening the text, reference to branding may be removed. 2.20 Given the heavy emphasis that devolved administrations place on their agri-environment schemes for achieving integrated management, the code needs to place stronger emphasis on opportunities to match-fund these schemes. I have attached a paper that I prepared a few years ago in relation to Glastir, for how private sector funding might be used to add value to agri-environment schemes, which themselves might be re-deployed as business incubator capital rather than one off grants. We have not increased the emphasis on this at present, but we will be actively be exploring the potential for this, in particular with colleagues from the Welsh Assembly Government in the context of Glastir (we have already begun this dialogue). Depending on the outcome of this during the pilot phase, we may increase the emphasis on this in the next iteration of the Code. ! Eligibility 3. What are your views on contractual requirements for projects accredited under the

Code e.g. minimum/maximum contract length, dispute resolution, issues around security of tenure and relationships between landowners and tenants?

UU questions re: climate change and viability of long-term contracts in Peak District are handled under our proposed risk assessment and adjustment of buffers and are unlikely to make long-term contracts in these areas viable I have asked for advice re: dispute resolution. 3.1 Yes, all OK 3.2 Mostly fine although section 2.2 need some further attention. Section 2.1. Frequent use of “shall”. ‘Shall’ or ‘will’? Guidance Box refers to Section 3.4. Should it be 3.2? Cross-reference has been corrected. 3.3 Section 2.2. Guidance Box: The definition of ‘peat’ is not the one commonly used in Scotland. The implications of this are not entirely clear and will need consideration. For example, it is stated that sites from which peat deposits have been lost are included. Surely some peat must remain to be eligible.

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We also recognised that there difficulty in establishing comparable definition of peatland across UK (see JNNC report 445) but using the international soil classification will create additional difficulty for non-specialist users of UK soil. Published maps were established using national soil classification. To be useful to the non-specialist this guidance need to provide link to interpreted soil maps or additional guidance. There is also some erroneous reporting on source of information. SSKIB soil map from the James Hutton Institute – this is mixing two sources of information the database SSKIB (which provide average soil properties across Scotland) with soil maps available at 1:250,000 for whole of Scotland and large resolution for part of the countries. It will be interested to have a preview of the best practices restoration guidance (in prep.) mentioned here. The definition of peat has been changed to match the definition used in England and Wales and by the Woodland Carbon Code (50 cm) to ensure that the Peatland Code is consistent with the Woodland Carbon Code. This can be reviewed during the pilot phase, and if appropriate it may be altered to the Scottish 1 m (or some other) definition in future. Reference to SSKIB is now “SSKIB soil database and maps from James Hutton Institute (Scotland)”. Best practice guidance will be available in rough draft in September, and will be available for contributions and revisions during the pilot phase of the Peatland Code. 3.4 Section 2.4. Should be clear from the start that “ownership” includes tenancy. Also may be an issue if tenancies shorter than Agreement. Guidance Box, 4th Paragraph – “PDD”? Mineral extraction rights could also be specifically included list of rights. In the second last paragraph, the implication of provision of equivalent area of new peatland restoration needs to be considered. Do this implies that restoration processes will start afresh on new area? We are keen to distinguish between ownership and tenancy as tenants have significantly less rights and are unlikely to be able to enter into contracts without consent of owners – this is now clarified in the first sentence of this section. PDD has been explained (Project Design Document). Mineral extraction rights have now been included explicitly in the list (under rights of withdrawal). Yes, it is intended that restoration would need to start again on a new unrestored site of similar size. This has now been clarified to state that it should be of similar size and similar GHG mitigation potential, and that restoration would have to be initiated on a previously unrestored site. 3.5 Section 2.6. Requirement 3 – Investment Test. Needed to read this several times to understand. Need reworded to make it clearer. Guidance Box – Legal Test. Not sure what ‘finance unavailable’ means. There may, for example, be an agri-environment scheme which would fund such works, but if an application is unsuccessful then is that finance unavailable? The investment test has now been removed. Finance unavailable would include if sufficient funding could not be raised from agri-environment applications, if this meant restoration was not financially viable. This has now been amended as follows (additions in italics): “…where sufficient finance has hitherto been unavailable to achieve these objectives (whether privately or via agri-environment schemes)…” 3.6 No comment, at this stage 3.7 Contracts should be of sufficient length to provide confidence that the benefits of peatland restoration will be maintained in the long term, i.e. providing adequate assurance of permanence. We suggest a minimum period of 30 years, and preferably 50 to 100 years. We do not think that there is a need for contracts beyond 100 years. This is consistent with other carbon standards.

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Contracts between buyers (investors) and sellers (landowners/ intermediaries) should cover a number of issues. The may include:

• Assignment of carbon sequestration rights for the contract period, including any surpluses

• Duration of the project • Definition/location of the land subject to the agreement • Guarantee that management practices are carried out as laid down in the

management plan • Naming/ branding/promotional rights for investors / intermediaries (eg signs on

display) • Maintenance of public access • In event of land sale, actions to inform buyers of the terms of contract and/or secure

buyer agreement to observe this contract • Provision of alternative sites if land ceases to be available for purposes of the

contract • Avoidance of technical claims about sequestration without prior approval • Confirmation of periodic verification

Contracts are a matter for buyers and sellers to arrange and do not, in our view, form part of any code. Contract-related disputes are, therefore, a matter for the courts rather than for the body that will run the UK Peatland Code. We recommend, however, that guidance be provided (e.g. on the UK Peatland Code website) on the issues that any contract should be expected to cover. Assurance of permanence is a key consideration when assessing eligibility. It is helpful if existing regulations, or legal instruments, can be used to provide assurance that peatland restoration is a permanent change in land management practice. The use of conservation covenants, as discussed in the consultation document, may help (but see further comment in Q5). Other sanctions or incentives may be possible to ensure that such management practices are maintained in the long term – these may include de-certification, cancellation of credits or ‘payback’ from the buffer for maintaining certification. The Code now makes it clearer that disputes are outside the remit of the body governing the Code, and details the sorts of issues likely to be covered in contracts. The guidance under section 3.2 now details options including decertification, cancellation of credits and payback from the buffer. Although WCC do not see need for contracts >100 years, we are suggesting that though this would be the normal expectation we would not wish to exclude longer contracts if both parties are agreeable, given the length over which peat forms and the objectives of some NGO land owners. We will retain the 30 minimum contract length on the basis of feedback, noting the warnings that this will limit participation in the pilot phase. Shorter contract lengths may be considered after the pilot. 3.8 Dispute resolution, who will be the impartial assessor? What factors will be used to ensure the contractual requirements are being met. The Code now makes it clear that dispute resolution is not within the remit of the body governing the Code, and that disputes should be resolved via arbitration or the courts. However the Code provides examples of ways in which disputes may be resolved, as described in the response to comment 3.7. 3.9 JW: Dispute resolution, who will be the impartial assessor? What factors will be used to ensure the contractual requirements are being met? See response to comment 3.8

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3.10 a. A significant part of peatland restoration Carbon budgets are avoided losses

(e.g. prevention of erosion through bare peat revegetation) and transitional gain (e.g. short term build-up of sedimentation above gully blocking dams). These two factors can realise benefits in less than 10 years which is a more feasible timescale for many land owners and investors

b. 3.a is also the land currently acting as significant sources of Carbon loss from upland peatland and therefore the larger benefits in peatland restoration. The so called “low hanging fruit”.

c. 30 – 100 years is a reasonable time for active blanket bog to accumulate enough peat to make accounting worthwhile.

d. 30 years minimum will still be too long a time period for many people to commit their land management practises, e.g. tenants with FBT’s.

e. Climate change will make any current estimates dubious at the higher end – e.g. will the Peak District be within the climate envelope for active blanket bog in 80 years? Is there a penalty for participants if this is the case?

f. Future uncertainties over market forces at these timescales will also act as a potential barrier to people signing up – e.g. the future of agri-environment schemes.

g. It is unclear who owns the Carbon accumulated by active peatland – e.g. landowner, AHA tenant or sporting rights holder?

For the pilot phase, we wish to take a conservative approach, and given short-term methane production in some sites, we would like to set a minimum contract period of 30 years. However, shorter-term contract lengths will be explored as part of the pilot phase. We recognize that 30 years is likely to be too long for many landowners to be willing to commit land to the pilot phase, but we are keen to take a conservative approach during the pilot phase that optimizes the likelihood that the Code will deliver climate benefits, and there is sufficient land available from landowners who are likely to be content with long contract lengths to operate the pilot phase. Buffers will be increased for sites that are most likely to impacted by climate change (e.g. Peak District). It is not possible to predict future market forces, and we accept that this may limit participation in the pilot phase by some landowners, however, once a contract has been entered into, it is binding even if the land could be used more profitably for another purpose that would conflict with the goals of restoration. Carbon would be owned by the buyer, who may in theory sell it to others in future via the voluntary carbon market (although this is not permitted during the pilot phase). 3.11 Important aspects that are necessary. It would seem difficult to include areas under tenancy and limiting to freehold might be less problematic and much preferred. Although we expect that participants will mainly be freeholders, we do not want to preclude tenants who have consent from landowners to participate. 3.12 RICS has no strong view on the upper limit of 100 years which, in practice, could be regarded as perpetuity for many practical purposes. That said, we can also clearly see the case for a minimum term to be set, but would have concerns that a minimum term of 30 years for a concept, which is not familiar to the majority of landowners and is as yet untried, may prove too great a deterrent. In the interests of innovation and early adoption, RICs recommends reconsideration of this point to allow for shorter agreements during an initial period of development. This could, and should, be reconsidered as confidence in the code develops but, in the shorter term, may be an important attribute if contracts are to be attractive to a full range of landowners and managers. We welcome the recognition of the potential professional role for chartered surveyors in using the code. We accept that the 30 year minimum is unlikely to be acceptable or attractive to many landowners, but we believe there are sufficient landowners who will be interested in contracts of this length for the pilot to operate, and contract lengths will be reviewed during the pilot phase.

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4. The Code proposes that restoration on designated sites (which represent the majority of UK peatlands) would be considered “additional”, as restoration is unlikely without additional funding via the Code, despite the fact that in theory there is a duty to restore to meet condition targets. What are your views on this?

4.1 De facto, restoration is not occurring - so if csr funding encourages it, it will be additional. separately, the 15% finance threshold seem pragmatic but if (e.g.)on-going costs are the element paid for, then the longer the envisaged contract the higher the % contribution - yet the 15% contribution may notactually be realised for some time. does this matter? Financial arrangements will be worked out in detail during the pilot phase, but it is anticipated that sponsors will provide costs up front, with these funds then being managed over the course of the project to deliver long-term maintenance. 4.2 - It is important to note that most UK peatlands are not designated. Only a relatively small proportion are. The issue on designated sites is not particularly different from that off sites as management would be funded through agri-env measures. It is just that in this context designated sites might be a higher priority there it cannot be assumed that designated site funding is always available. No response required. 4.3 I think the Code’s approach is fair. It is unrealistic to expect landowners and land managers to be able to fund peatland restoration without additional support. No response required. 4.4 Our understanding is that the management objectives for international designated sites are already set, and that if such sites are not in ‘favourable condition’ then the landowner and Statutory Nature Conservation Agency are obliged to improve the condition of the site. The SNCA may help land owners/managers apply for funding schemes, and such funding schemes are already available, for instance through RDP Environmental stewardship, conservation enhancement schemes, etc. As such, the UK Peatland Code could offer a useful extra source of finance. We think that clarity is needed on the particular aspect of additionality which is being tested. The document refers to the ability of the UK Peatland Code to bring in additional funding (therefore relevant to a financial/investment test), but the issue of designated sites refers to EU and/or UK legislation (and therefore relevant to a legal test). In other words, additionality requires the legal test to be passed as well as other tests such as the finance/investment test. As currently set out, we think that it is difficult to argue that restoration on these designated sites could be seen as “additional”. A case for additionality on designated sites needs to be crafted very carefully. An inconclusive case could be damaging to the reputation of the UK Peatland Code. However, we do understand the complex arguments surrounding additionality – and that having a policy or requirement in place at national level does not mean that actions will be implemented in the absence of finance. Although all the feedback we have received is positive regarding funding restoration on designated sites via the Code, we note the caution advised by WCC here. We have further clarified the wording under “legal test” in the guidance for section 2.6 accordingly, and it is made clear that the legal test in addition to the two other tests must all be met to demonstrate additionality. 4.5 Agri-environment payments are the primary delivery mechanism for favourable condition of designated sites. Annual agri-environment payments are based on the ‘profit foregone’

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principle because international agreements limit the State’s ability to buy public goods from landowners. The peatland code offers the opportunity to positively pay landowners for the services they provide, on top of agri-environment payments that offset their loss of income, and this can potentially achieve much better restorations and continued delivery. However there is a pressing danger that in a time of public sector cuts and reductions in CAP, mechanisms like the peatland code could be used to fill the space vacated by public sector withdrawal. The peatland code must link peatland restoration payments to agri-environment payments to emphasise the range of goods and services delivered and the importance of continued public sector support and commitment to legal obligations. Promotion of a voluntary peatland code should avoid undermining the case for a compulsory peat levy on peat extraction by emphasising the difference between a voluntary corporate responsibility approach and an approach designed to discourage active destruction. We are actively exploring the link between payments under the Peatland Code and agri-environment schemes as part of the pilot phase, in particular in relation to top-up funding of peatland restoration options within Glastir in Wales. We would expect that most landowners would want to maximise income by applying for agri-environment funding alongside funding from the Peatland Code, however we will explore how such arrangements may be co-ordinated in practice during the pilot phase. 4.6 Peatland sites are designated for nature conservation, not carbon. It is reasonable for additional investment in peatland restoration to maximise Carbon benefits in a shorter timeframe. No response required. 4.7 Section 4.1 doesn’t really need to be so long, all you really require is a complete and accurate PDD. Section 4.1 simply summarises the content of the PDD. 4.8 The practicality is that funding may not otherwise be available. No response required. 4.9 This depends on the budget and capacity available at SNH for restoration of site condition to favourable, and the amount that can be allocated to peatland sites. No response required. 4.10 Entirely reasonable; the public purse doesn’t have the £capital to achieve this core duty. However, I would add that carbon soils are effectively a new mineral asset for the freeholders, so it should be in their interest to manage this resource appropriately; for example by working more closely with their tenant farmers/graziers associations to achieve appropriate grazing and burning management of this resource. No response required. 4.11 RICS would like to see how the proposal requirements work out in practice before committing to a clear view on this aspect. Our members raised concerns over the clarity of the purpose of the proposed Contribution of Carbon Finance test, particularly with regard to the potential for peatland management schemes which may derive their funding from a number of sources for multiple ecosystem service benefits.

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The Code is now designed to explicitly be able to run in parallel with agri-environment schemes. 5. Do you have any other comments regarding the eligibility of projects under the

Code? 5.1 NO 5.2 Methods to stop double counting is good. 5.3 No comment, at this stage 5.4 We agree with the principle that sponsors should reduce emissions at source wherever possible before claiming emissions reductions through peatland restoration (see p8). We have made the same point with regard to woodland creation under the Woodland Carbon Code. However, we would like to see further evidence about whether a cap on the amount of GHG reductions a carbon buyer can claim would be a workable solution in practice. A 5% cap appears very low, and would limit investment from service-based industries who want to do the right thing, but do not have high emissions (for example, a regional Estate Agency who want to account for their travel related emissions). Also, it is not clear whether the cap would apply to the annual or the total emissions reduction of a peatland project, as a proportion of annual emissions of the investor. Unless a workable approach can be devised, we recommend that the cap is dropped. The 5% emissions cap for investors has been dropped, for the reasons outlined by WCC and due to challenges of enforcing the cap in reality. Section 2.2 on “Eligible activities” states on p9: “or species known to support the establishment of appropriate peatland species”. This sounds vague and is in danger of being one step removed from any impact on carbon stocks. We think that the ‘cause and effect’ must be clearly established; for example, it should be clear whether the establishment of such peatland species actually results in increases in carbon stocks (either through prevention of losses from degradation and/or formation of new peat). We also think that ‘appropriate’ species must be defined. The reference to species that would lead to the establishment of peatland species has been removed, and the follow text has been clarified (additions in italics): “leading to the re-establishment of species that are normally peat-forming, for example Sphagnum bog mosses and, where relevant, other species identified in designations.” Under the ‘means of verification’ described on P9, it will be essential to ensure that these methods would be adequate to show what previous land management practices (which degraded the peatland) had been. Otherwise, there would be no ‘baseline’ management practices against which practices aimed at restoration could be compared. This text has been clarified in the introduction and guidance for section 2.2. Under the Guidance in Section 2.2 on p9, we understand why all histosols are within scope (ease of definition). However, this would bring the majority of the uplands into scope (20% carbon and 40 cm depth), potentially allowing carbon credits to be generated in areas where the benefits of restoration would be more questionable. This could be addressed by being more selective about soil types (further guidance may be needed), or including a requirement that a fully functioning bog be restored.

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With regard to the same issue (on P9), it should be noted that the Forestry Commission, following a public consultation and input from stakeholders, set out in both the UK Forestry Standard and the Woodland Carbon Code that the definition of deep peat is 50cm. We think it would be sensible to align the UK Peatland Code with this, so that restoration of peatlands would focus on soils with over 50cm peat – and woodland creation as per both standards, would occur on soils with less than 50cm. We would be concerned that using a 40cm threshold would mean that peaty-gleys and shallow peat soils would be included. The threshold has been changed to 50 cm as advised. The reference on p9 to forestry removal should include a link to Scotland's woodland removal policy (which is due to be updated soon): http://www.forestry.gov.uk/woodlandremoval, as well as any parallel guidance for Wales and Northern Ireland. This link has been updated with information for Scotland and Wales and Northern Ireland have been contacted (awaiting replies) for links to their policies. Section 2.3 on “Eligibility of sponsors” states on p10 that “Pilot projects accredited under the Pilot Phase of the UK Peatland Code are not to be used for offsetting purposes.” We think it should be made clear that, in terms of international carbon accounting under the Kyoto Protocol, such projects cannot be used for offsetting purposes. We also suggest that there should be a link in the ‘guidance’ section on p10 to Defra's Green Claims guidance and to Defra’s GHG reporting Guidance. The section on eligibility of sponsors has been removed. Under section 4.3 we have been explicit that “it is not acceptable to use climate benefits in formal corporate carbon accounting or for any offsetting purpose at this stage”. The guidance on P11 refers to the potential to use Conservation Covenants in England and Wales. We understand that these conservation covenants are a new initiative which is still out for consultation; their use is starting, more especially in urban areas e.g. to protect listed buildings. The text should be clear that, in the context of the Peatland Carbon Code, these covenants are concerned with biodiversity and that the associated process has not yet been finalised. This has been clarified in the text. We have the following comments about section 2.6 on additionality:

• Test 2 differs from the Woodland Carbon Code by including income foregone in restoration costs? We question why income foregone is included, as this could make estimating costs more complex/questionable. It would also be useful to set a timeframe for the calculation of these costs (e.g. are they the costs over part or all of the lifetime of the project?).

• It is not clear why 15% has been set as the threshold for Test 2. We suggest that 15% is set as an initial threshold under Test 2 to allow for flexibility in future.

• The guidance on p13 states that".... where peatland restoration is partly funded by Government and partly funded through private sponsorship, it will not normally be possible to trade these GHG emission reductions on voluntary markets or include them in corporate carbon accounting." If this is the case, it's not clear what the benefits of certification under the UK Peatland Code are for these projects. This also contrasts with the approach taken for the Woodland Carbon Code.

• There is some confusion about grant payments and payments by business sponsors. On p2, it says that (under bullet 2) "sponsorship is sought from businesses to cover the full costs of restoration, including ongoing costs..." Later on, reference is made on p4 payments, single farm payments and p13 to ELS and HLS payments.

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• On p21, it is not clear how projects avoiding peat extraction will become additional at a later date.

In the contribution to carbon finance test (test 2), we mention income foregone only in the context of agri-environment schemes, which may interface with payments via the Code. The 15% figure has been further explained as recommended. We have now taken an approach to combined Code and agri-environment scheme payments that is consistent with the WCC, as suggested here. The use of the word “payments” has been checked and clarified throughout the document. The details re: peat extraction projects have been removed, and a simple statement has been included, stating that the possibility of including such projects in future will be explored during the pilot phase. 5.5 Restoring peat forming habitats may not be possible or even desirable in some cases, for example where the current overlaying habitat is Coastal & Floodplain Grazing Marsh (C&FGM). However it may be possible to re-wet C&FGM, thus avoiding peat degradation and carbon flux and also benefiting other wetland species, particularly breeding waders and wintering birds, and archaeological interest, without changing it into a different habitat such as fen. We would prefer that this were mentioned specifically as an eligible activity Many of the peat voids in the Somerset Levels and Moors are so deep that reed bed and open water is the best possible option for restoration. Would these count as restored peat forming habitats under these eligibility criteria? Often there is little peat left in the void, so the avoidance of flux would be minimal.. We expect that the amount of carbon sequested by reeds would be relatively insignificant making restoration not particularly cost-effective from a carbon point of view. In the Somerset Levels and similar sites with minimal carbon benefits, given that the Code uses payments for carbon as its back-bone, this is likely to cause problems for monitoring etc. and would probably be easier as bi-lateral agreements between sponsors and landowners outside the Code. Where carbon gains are likely to be significant, we do not yet have adequate cost-effective monitoring methods. It is therefore proposed that restoration of lowland raised bogs and fens are not included in the pilot phase, but that this phase is used to actively explore monitoring and other needs associated with bringing these sites into the Code e.g. extending the GEST approach to these sites. 5.6 Defining the minimum peat depth as 40cm is confusing when other Codes such as Heather and Grass burning Code refer to 50cm. One depth (however arbitrary) should be agreed on. See response to comment 5.4 – 50 cm will now be used. 5.7 The word ‘should’ is used instead of ‘Shall’ throughout section 5… shall is more appropriate with regard to auditing. “Should” has been replaced with “shall” where relevant throughout the Code. In section 5.3, ‘Monitoring Plan in place before project begins’… but projects could have started as early as 2010… would they have one in place before they began? A footnote has been added as follows: “For projects that have already started, it would normally expected that there will have been a monitoring plan in place with data collected from the start of the restoration work. Although baseline monitoring prior to restoration is preferred, it is accepted that this will not always be available. In section 5.3, ‘Regular Intervals’ & ‘Regular Monitoring’… need to be specific.

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Specifics are provided in the guidance box for this section – this is now referenced in the introductory text to avoid the impression of ambiguity. In section 5.4, requirements should be direct and to the point any explanation can be in the guidance. Details have been moved to the guidance section as suggested. 5.8 We could suggest a minimum WISE score?? Prioritisation of pilot restoration sites for the pilot phase Peatland Code will be informed by criteria developed for WISE scores, however in the operation of the Code itself, prioritisation of sites for restoration will be dictated by the market (taking into account minimum criteria for inclusion outlined in the Code). 5.9 Should be a basic area-based sponsorship option, based upon the unit area of carbon-rich soils (not just peatlands), which might be moderated by the following: peat depth (incentives for freeholders to commission surveys to find out), condition and conservation status of priority habitats, presence and conservation status of priority species (e.g., upland breeding birds, extent of climax Sphagnum communities, upland dragonfly/damselfly assemblage richness etc) and e.g., presence of rare or locally distinctive equines and rare breeds on the hill. The point here being that the Code should incentivise or reward other added values. See response to comment 5.8. Project governance 6. Are you satisfied with the measures proposed to manage risk and permanency of

climate mitigation benefits? If not, what improvements would you suggest? 6.1 Yes, but are we concerned about leakage within the bounds of a project, the uk or internationally? Leakage is considered within the UK only. 6.2 What about leakage of damaging activities/land-use changes occurring outside the UK – for example, getting money to restore cutover/extracted bogs in UK, whilst shifting production of horticultural peat to eastern Europe? While this is a legitimate concern, it would be difficult to effectively monitor leakage outside the UK. However, by not including avoidance of extraction in the Code, it is hoped that some of the worst excesses (as exemplified in this comment) may be avoided. 6.3 Yes, although worth noting (Section 3.2 Guidance Box) that tree planting is not ‘natural’, and it can cause problems even if not within the same hydrological unit as seeds can blow across hydrological barriers. Also fencing to exclude deer can result in changed patterns of movement which may affect a restoration site. Tree planting has been moved from “natural” to “external” risks, and a reference to deer fencing impacts has been added, as suggested. 6.4 Also (Section 3.2 Guidance Box) most of Scotland is not actually that remote. In addition, remote sites are less likely to be a priority for restoration due to the additional associated costs of getting materials and personnel on site. Also coastal peatland in Scotland may be at

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risk of sea level rise. Change in atmospheric deposition rate may also constitute a risk to project success. The reference to Scotland and England has been removed from this sentence, which now focuses on the relative size of buffers required for highly visited and drought-prone sites versus less visited, wetter sites. A reference has not been added to coastal peatlands, given that the Code currently focuses on blanket bogs, which are mainly located at higher altitudes. A reference has been made to changes in levels of atmospheric deposition under “external” risks. 6.5 It’s important that the UK Peatland Code provides adequate assurance of the long-term maintenance of net emissions reductions. Prevention of emissions reductions re-release over an indefinite period would be a more accurate definition of permanence than the stated 100 years. The definition has replaced 100 years with “indefinitely”. 6.6 Linked to this, the proposed means of verification (para 3.2) would benefit from being strengthened, particularly in relation to securing continued commitment to permanence in the event of changes of ownership and beyond the project duration. It is also unclear how the proposed measures would help to ensure the permanence of avoided emissions. The Code now lists the following as a means of verification of permanence (added text in italics): “Evidence of contracts requiring continued implementation of the Project Design Document by the land manager and requiring the landowner to inform future owners of the commitment to the Peatland Code and to seek ongoing commitment to maintain agreed vegetation cover and water levels on a change of ownership or occupation”. 6.7 In terms of risk management, further guidance will be required to clarify the metrics to be used in assessing projects against the proposed risk criteria; and whether or not the Code requires accredited surveyors to be engaged to undertake the assessment as this could add significant cost. We are seeking advice on this point, and will clarify this during the pilot phase. 6.8 The proposed approach to managing the ‘GHG emission reduction buffer’ seems unclear and further guidance is required on aspects such as the circumstances under which projects can share or pool their buffer contribution and the nature of the losses to be covered (eg. how force majeure events are to be dealt with). We are seeking advice on this point, and will clarify this during the pilot phase. 6.9 OK, within the limits of what is feasible No response required. 6.10 RICS is of the view that registration, in a readily-available register, would be essential for the proper management and administration of land. The Law Commission is proposing that Conservation Covenants be permitted to register as a local land charge. This proposal has an advantage that this is a source of information familiar to most conveyancers and others called upon to advise on land management, purchase or transfer. We have mentioned the Law Commissions consultation and are suggesting that these could usefully used in contracts under the Peatland Code. 7. Are you satisfied that requirements for projects to consult stakeholders are

appropriate and proportionate? If not, what improvements would you suggest?

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Yes - although this may be quite burdensome, so who covers the costs? This does seem quite onerous, although depends to some degree on means used. Some examples of appropriate means might be helpful, e.g sign on site, notice in local paper. Minimum of 12 weeks seems excessive The area-based requirement for projects to consult stakeholders appears arbitrary, particularly as some smaller projects may still have a potentially significant impact (eg. restoration projects involving woodland). Alternatively, emphasis might usefully be placed on the project’s potential impact with the guidance also referencing applicable Environmental Impact Assessment regulations. To assist project developers plan their consultation, it would be helpful to include a separate statement outlining details of the minimum required process for consulting rights holders and other key stakeholders (including appropriate means of communication). Those who addressed this question felt the Code’s requirements were too burdensome. We would like to retain a conservative approach for the pilot, but to make it less burdensome more detailed guidance re: specific expectations has been added to the Code. The area-based requirement has now been removed. The Code links to EIA regulations, but these do not cover all sites. The length of time available to consultees has been reduced to a minimum of 8 weeks. 8. Do you have any other comments regarding project governance under the Code? 8.1 NO 8.2 We are unable to offer any view on this 8.3 The UK Peatland Code will need to allow for the robust and transparent registration of both project details and carbon credits. This is essential to underpin the accurate recording, tracking and reporting of net GHG emissions abatement and also investor/market confidence. Many aspects of the current registry proposals lack detail and this is something that will clearly need to be addressed and given priority as the Code is further developed. The proposal (para 1.2 ‘Using the Code’) to require projects to gain independent validation/verification by an accredited certification body (in a similar manner to the Woodland Carbon Code) is welcome in order to ensure transparency and quality assurance. For the procedures to be effective however, the UK Peatland Code team will need to work closely with both UKAS and the certification bodies involved to develop, pilot, and finalise agreed procedures before any projects could be validated/certified. The certification bodies used for the Woodland Carbon Code have been accredited by UKAS for that purpose – a separate approval process would be needed for them to be accredited as certification bodies for the UK Peatland Code. On 16 guidance on permanence and risk it would be useful to consider the impact of changing landuse on neighbouring sites and also better to think about ‘the impact of landuse’ more generally rather than only the ‘impact of tree planting’ under ‘natural risks to the project’. 8.4 No comments on project governance. It all seems satisfactory for the purposes of the trial. 8.5 Natural risks to the project could also include habitat damage and changing species composition / abundance due to nutrient enrichment or acid deposition from air pollution. Project and carbon credit registration and other issues around registry will be addressed during the pilot phase. We have opened dialogue with UKAS and one of the certification bodies used for the Woodland Carbon Code, and are seeking a budget to develop certification/validation/accreditation procedures with them during the pilot phase. We have

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broadened the reference to tree planting and added a reference to acid deposition under “external risks”, as suggested. Documentation 9. Are you satisfied that project management guidance is appropriate and

proportionate? If not, what improvements would you suggest? 9.1 The guidance seems ok, but are we envisaging that third-party expertise is likely to be deployed to actually work-through the application process (including consultation) and subsequent monitoring activities? are such transaction costs included in project costs (i.e. the 15% contribution) and/or will somebody else cover them? 9.2 Again, as in question 7 this seems quite costly. May need to moderate according to scale of works. Template documentation and/or worked example would help. We are not aware of any evidence that restoration reduces wildfire risk – although might reduce potential impacts of wildfire. 9.3 It would be useful to see your template documents (eg Project Design Document) to comment upon whether they are suitable. Experience from our pilot suggests that these documents will evolve with useful input from both the projects and the certification bodies to make them fit for purpose. Frequently we have noticed that links to further information only relate to guidance available for England. Guidance for Wales/Scotland/Northern Ireland also exists and should be referenced. 9.4 Seems quite detailed We are anticipating that third party expertise will be used to work through the application process and conduct monitoring, and it is expected that this will be costed into projects. This would be included in the 15% contribution to project costs. A Project Design Document has now been produced, although incomplete (it will be completed as part of the pilot once the GEST approach has been turned into a standardized field monitoring protocol). The reference to wildfire risk has been removed. Where possible links to further information relating to Devolved Administrations has now been added. 10. Do you have any other comments regarding documentation under the Code? 10.1 NO 10.2 Again it will be interesting to see their good practice guidance. Relocation of peat. I will be worse to explore further if it is a good idea to totally rule this out. There have been development cases where movement of peat is beneficial to aid restoration : infil of deep ditches: but it could that such practices should not be encourage and the premise is that peat should be left in one place. Other case could is peat as already been displaces e.g. from the cleaning of a reservoir could that be used in restoration projects. Best practice guidance will be produced in draft by 10 Sept and will be further developed and refined during the pilot phase. The development of this guidance will be overseen by a Technical Working Group. Natural England have been invited to chair this group. This will in turn be overseen by a Steering Group.

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10.3 With the Woodland Carbon Code, we have found it necessary to produce a template document for almost every document that we’d want projects to submit for as evidence at validation/verification. This aids consistency and makes validation quicker and easier but also provides the projects with more structure – so the task is less onerous for them too. In 4.1 p19 above principles, we think it important that adequate evidence is provided to support ‘clear and accurate’ statements about changes to carbon flux in peatland restoration. The timescales involved need to be fully understood and account taken of any ‘spikes’ in GHG emissions (CO2 or methane) during the restoration process? 4.1f – We don’t think it is possible to identify the verifier for the lifetime of the project – projects would presumably be free to choose the best verifier at each verification. In 4.2 Management Capacity – Guidance – The hyperlink is for England’s open habitat restoration policy. It would also be useful to link to the imminent Practice Guide: Managing open habitats in upland forests’. Also links to the FC pages on forestry regulations including EIA regulations – ie a comment about requirement of felling licence for removal of trees, and a general presumption against permanent deforestation. 4.3 Carbon Statements & Reporting – On p22 the net emissions savings also need to be adjusted for the baseline – not just the leakage (The baseline scenario – emissions on the site over the project duration without the project, leakage – emissions over the project duration outside the site as a result of the project. and the project’s emission savings will change through time and all need to be accounted for over the lifetime of the project). Although the pilot will test the ‘process’ of the UK Peatland Code, presumably it will only be able to test ‘validation’ of the project and not the subsequent monitoring and verification. Where there is reference to the UK Peatland Code logo, it’s essential that there is not suggestion that this is trademarked prior to this being the case – We have found that the Intellectual Property Office is very particular about claims on ‘trademark’ status. We are content with the re-design of the UK Peatland Code logo in the consultation version. ‘Rules of use’ of your logo will be needed, and should be in place if you do wish to trademark your logo. Happy to help or comment on these. Reference to verifier for the duration of the project has been removed under 4.1f. The “Practice Guide: Managing open habitats in upland forests” does not appear to have been published yet, but this link can be added at a later date. We have noted the need for felling licenses and the presumption against felling in footnote 6. Projects are now advised to adjust for the baseline as well as for leakage. We have removed all reference to “trademarks”. 10.4 In the ‘Restoration and maintenance techniques’ section we would like the raising of water levels in C&FGM on peat soils as an option. We understand the arguments why avoidance of peat extraction can’t be considered at the pilot stage. However avoiding extraction would make new sequestration more viable. When all the peat is extracted from a void it limits the options for restoration to reed bed and open water and the restoration of peat forming habitats becomes a very long-term aim. The more peat that is left in a void the greater the opportunity to restore peat forming fen or even bog habitats. It would be a shame to miss the opportunity to incentivise shallower excavations and therefore better restorations. See response to comment 5.5. 10.5 No comments on documentation. It all seems satisfactory for the purposes of the trial. No response required. 10.6 It will be useful to have the link to the template PDD as shown on page 20 but not yet working.

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See response to comment 9.3. Monitoring climate and other benefits 11. Are you satisfied with the principle of using proxies to cost-effectively infer

changes in GHG emissions using the Greenhouse Gas Emission Site Type (GEST) approach? Do you have any comments on the proposed methodology?

Summary response: UK GEST estimates should have been published in June – need to chase with Ruth/Jane. Need to more completely define what counts as degraded peat – this could be done during the pilot, given that we won’t allow controversial sites into the pilot. We can (hopefully) use the same justification that the German group have used re: DOC/POC, Nitrous Oxide and methane emissions in the GEST approach – need to discuss with them to articulate this appropriately. Suggest to discuss WCC comments re: GEST approach in more detail with MAS in first instance. Where restoration activities are not covered by the GEST approch, how do we suggest monitoring is done? Or should we restrict to restoration activities covered by the GEST approach? Need to find out where we can get relevant discount rates. 11.1 Will baselining (and progress monitoring) be based on one year or averaged over several, to account for year-on-year variation around a trend? and will an upward baseline trend attributable to climate change be assumed? (it makes a difference to emissions avoided) The GEST approach will overcome the need for multi-year average baselines as vegetation composition does not fluctuate significantly from year to year. 11.2 I think it needs a definition of what counts as degraded peat – ecologically in terms of GHG emissions and also what is and isn’t eligible within the code. Is totally wasted arable fen peat in East Anglia as eligible as recent upland grip blocking. The HGH and biodiversity benefits (absolutely and per pound) are very different from these two examples. I fully support the use of GESTs for the assessment of emissions changes, as used in Belarus and the VCS standard, but in order to judge the appropriateness and degree of confidence in estimates, and therefore likely changes, it’s necessary to see the UK GEST estimates – when will they be published? Lowland raised bogs and fens won’t be included in the pilot phase. The UK GEST estimates have now been published on the Natural England website here: http://randd.defra.gov.uk/Document.aspx?Document=11329_NE0136_TechnicalAppendix.pdf 11.3 Generally yes. Principles promoted in this code should align with approach used in IPCC and other national accounting schemes. In Section 5.1, establishing of a carbon baseline as presented here only considers GHG emission baseline and initial land use change carbon stock loss. Should initial and change in soil carbon stock be recorded? The GEST approach accounts for changes in GHG emissions, not carbon stocks. 11.4 The GEST approach is adequate as a first approximation of greenouse gas emissions for ‘Corporate Social Responsibility’ projects – i.e. where restoration of the site is the key objective rather than quantification of greenhouse gas emissions savings. However, the methodology must include nitrous oxide and methane emissions as well as carbon dioxide; there also needs to be clear evidence that the GEST models, which have generally been developed in different climatic regions to the UK, are applicable to UK peatlands. It is right that this development of the science and accounting/monitoring methodology is a focus of the pilot phase of the Code. A further aspect of the methodology that should be addressed through the pilot phase of the Code is how dissolved and particulate carbon (DOC and POC)

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are accounted for; this may simply be by taking the position that restoration will reduce losses through DOC and POC but, since they are difficult/impossible to quantify at a project level, they are not accounted for in the emissions savings associated with the project (i.e. taking a conservative approach). If later phases of the Code move towards the support for carbon trading, the GEST approach will come under more scrutiny as investors will expect GHG emissions savings to be verified. There will therefore be a requirement for robust and ‘tight’ relationships between vegetation type and GHG emissions to be demonstrated (under UK conditions) through the pilot phase of the Code. The approach of comparing the GHG emissions of the restored site with a reference (baseline) scenario is appropriate. However, the baseline will need to be dynamic to reflect improvements in scientific understanding and future changes in environmental (including climatic conditions); part of the verification process must be to update both project and baseline GHG emissions estimates on the basis of current knowledge and environmental conditions at the time of verification. International accounting methodologies (i.e. those applied by UNFCCC) will need to be considered when they are finalised, to ensure consistency between project and national level accounting. This may become an issue if national accounting is on the basis of gross emissions for restored peatlands that were drained prior to 1990. It is difficult to comment further as Natural England’s Preliminary GESTs for UK peatlands do not appear to have been published and the link in the draft Code is not active. If tree removal is possible as part of the project then the loss of carbon stock at the start of the project should be accounted for in the project carbon sequestration, and the carbon sequestration which would have occurred in these trees should be accounted for in the baseline scenario over time. The Woodland Carbon Code carbon calculation tools could be used to quantify this emission / sequestration. Equally it is unclear whether the baseline and project carbon sequestration cover GHG emissions from eg livestock, fertiliser application or site management. This should be clarified. It would be helpful to provide more detail and clarity on how leakage will be accounted for. These questions are addressed in the following report: http://randd.defra.gov.uk/Document.aspx?Document=11329_NE0136_TechnicalAppendix.pdf 11.5

a. We haven’t seen enough evidence that vegetation and water table depth proxies would provide complete enough data for the purposes of the scheme. We feel that more research is needed to verify this.

b. The variability in blanket bog water tables over comparatively small areas will make this a difficult factor to measure.

c. Fluvial Carbon flux is a significant element of peatland Carbon budgets and should also be monitored.

d. The code doesn’t define vegetation monitoring, but for this purpose we believe that it needs to be very detailed.

e. There needs to be agreed standardisation for monitoring protocols, as well as research protocols.

These questions are addressed in the following report: http://randd.defra.gov.uk/Document.aspx?Document=11329_NE0136_TechnicalAppendix.pdf 11.6 I can’t see realistically, how else it could be done. On the ground measurement is out of the question. I would like to know a bit more about the basis of any GEST values. These questions are addressed in the following report: http://randd.defra.gov.uk/Document.aspx?Document=11329_NE0136_TechnicalAppendix.pdf

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11.7 A simple outline or example of the vegetation proxy method would be informative in the Code. It is difficult to give informed feedback without reference to the Natural England GESTs, or having other further information on this approach. I would like more information on the uncertainty in the calculations of GHG emissions using the GEST approach. There is very little information in the Code document on the technical details of predicting the emissions. The Code gives the option for the use of direct observations using eddy covariance and/or closed chambers, however, I find it hard to imagine when a company would find it cost-effective to do this when they have the option of using vegetation proxies. Is there guidance given on acceptable models or modelling approaches that can be used? Where is this guidance found? Will there be a simple estimate of likely emissions savings arising from each of the proposed restoration activities, in typical peatlands in the good practice guidance or other PCC guidance? Are all of the accepted restoration activities covered by the GEST approach? Under section 5.2 Carbon leakage, actions needed if leakage occurs within the UK is addressed, but actions required if the restoration leads to peatland damage outside the UK are omitted. Section 5.3 Monitoring climate benefits is mislabelled as 4.3. In this section, it refers to “relevant discount rates” when discussing monitoring plans, but does not clarify what this refers to nor provide reference to where further details can be found. Please also include an active link to the GESTs for UK peatlands published by Natural England referred to on page 26. These questions are addressed in the following report: http://randd.defra.gov.uk/Document.aspx?Document=11329_NE0136_TechnicalAppendix.pdf Modelling approaches will need to be evaluated on a case-by-case basis, if they are proposed by projects for monitoring. We do not think it is realistic to attempt to monitor leakage internationally, although this is a valid point. Section numbering issues have been sorted. The UK GEST approach is now linked from the Code. Relevant discount rates will be determined as part of a financial modeling exercise planned as part of the pilot phase. 12. Are you satisfied with the way co-benefits are included, including the limited level

of quantification and the leaving the possibility open to market some of the co-benefits in future e.g. via biodiversity offsetting?

12. 1 Formal baselining and monitoring of co-benefits would be better - although this would come at a cost 12.2 Yes, but again some concerns over costs of monitoring 12.3 The guidance and requirements for biodiversity improvements and monitoring are too thin, and more needs to be made of this. After all, it’s an initiative being largely brought about by nature conservation agencies and not just for climate change benefits. Add some links and examples of best practice monitoring, and organisations who can advise – reliance on EIAs and statutory designations will not do the job. 12.4 We think this is an important aspect of the Code. The co-benefits (and dis-benefits) delivered by restoration are a key component of the project and there should be a strong narrative explaining exactly what these are. These might or might not come from an Environmental Statement – but there is a risk in making such a strong link between the two.

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An alternative approach would be to develop a core script on the specific benefits of restoration projects in specific circumstances. In time, these could be replaced by metrics as scientific and economic research progresses. The current focus on Ecosystem Services at a policy level suggests that there is merit in extending this approach to wider land use and land management, including through the Woodland Carbon Code. For information, the Forestry Commission is in the process of commissioning a pilot study on quantifying/regularising the ecosystem service claims of Woodland Carbon Code projects. Under guidance, the likely requirement for an EIA for projects involving deforestation should be highlighted. 12.5 DL: Selling one easily monetisable ecosystem services such as climate regulation could have detrimental effects on the provision of other ecosystem services. We need to find mechanisms capable of delivering a balanced range of services appropriate to the locality. The DEFRA document ‘Payments for Ecosystem Services: A Best Practice Guide (https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/200920/pb13932-pes-bestpractice-20130522.pdf ) suggests three different mechanisms for ensuring that a range of services are prioritised. One mechanism, ‘Piggybacking’, where a buyer purchases one ecosystem service as an umbrella for a range of less easily monetised services derived from the same piece of land, seems a good mechanism to ensure that the carbon aspects of peat restoration don’t override other less easily monetised ecosystem services. Piggybacking seems a more appropriate approach to peatland restoration than the ‘co-benefit’ approach suggested in the paper. Schemes should be positively encouraged to consider a range of ecosystem services and explicitly piggyback these together, even if it is the carbon related services that primarily attract the sponsor. Since the peatland code in its pilot phase is about corporate responsibility rather than carbon trading it makes sense to promote a full range of benefits, not just carbon. 12.6 Peatlands provide various ecosystem services and it is reasonable to value and cost these separately. The Code does not appear to recognise that water quality benefits can also be counted as Carbon benefits. 12.7 Something for future development; here we focus on carbon Most responses recognize that more formal monitoring would be useful but that it would be too costly. Links have been made to relevant agencies to advise on biodiversity monitoring. WCC suggest a pragmatic way of making these benefits/disbenefits more explicit via the Environmental Statement. The Code now suggests that where detailed monitoring is not possible, projects may create a narrative based on evidence from Natural England’s Upland Evidence Review for the restoration of blanket bog (NEER003) (and more recent evidence as appropriate) and include this in their Environmental Statement. DL mistakenly suggest the Code should follow a piggbacking approach, meaning that we should be bundling services – probably worth linking to this terminology to be explicit and link better to the Defra PES guide. We will not work extensively with commoners during the pilot phase given the complexities, however we will discuss the option to work with an existing pilot on common land with Welsh Govermnent, to explore what these issues might entail during the pilot. Based on NE feedback, latest evidence from the Natural England evidence review and a desire to take a conservative approach during the pilot we will advise that no burning can occur in pilot projects. The Code will currently focus on blanket bogs, and not lowland raise bogs and fens. Reference to SWW and South Pennines has been deleted from the Code. Establishing the registry and getting accredited by UKAS will take time and money, which is currently being sought. The pilot phase will last as long as it takes to get these established.

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We have removed “projects that seek to avoid peat extraction” from the list of activities that may be included at a later date. Yes, we have replaced the VCS link with UK GEST link. The layering of biodiversity offsets on top of peatland restoration projects is highly unlikely but it was recommended that we include this to make it possible to explore this on a case by case basis, rather than making biodiversity offsets ineligible across all sites in the Peatland Code. Agreed: more detail on reporting co-benefits would be useful in guidance re: preparing environmental statements, but not to the level of “calculating” these, to avoid unnecessary complication and costs. It is suggested that this is done on the basis of evidence from Natural England’s Upland Evidence Review. 13. Do you have any other comments regarding monitoring of benefits under the

Code? 13.1 Have indicative on-going monitoring costs been estimated? they might be quite high. We will do a detailed financial modeling as part of the pilot phase. 13.2 It will be good practices is outcomes of any environmental monitoring undertaken as part of this code could be made available through current nationale environmental monitoring and reporting scheme (e.g SSDW in Scotland or similar webbase INSPIRE compliant website and database). We will investigate this as apart of the pilot phase. 13.3 We need much more monitoring, not just to verify carbon budgets, but to inform future management and restoration. The entire management and risk plan needs to be monitored – including e.g. damaging recreational activities or wildfire risk management. Regular monitoring of climate benefits is planned (see guidance under section 5.3) and risks are to be re-assessed at the same interval. 13.4 What does the Ecological Site Classification entail? Is this an NVC survey? How does it fit in with the GEST approach? It’s not defined in the document or in the glossary. Under means of verification heading in section 5.1 Establishing a Carbon Baseline, the second bullet point “For baseline conditions, carbon baseline conditions in Project Design Document” is ambiguous and uninformative, please clarify. ESC has been replaced for NVC survey. A more detailed Project Design Document has now been provided. Overall 14. Do you have any comments on the overall proposed approach to the first (pilot)

phase of the Peatland Code? 14.1 How are costs to be determined? are we envisaging "standard costs" akin to agri-env schemes, or are they to be negotiated for each project? if the latter, then it is difficult for to know in advance what a given csr budget might actually buy? Costs are to be based on the costs of restoration plus all additional expenses (e.g. maintenance and monitoring), and these will differ from site to site. Market research suggests that the CSR market is used to “bespoke” products like this, where prices and co-benefits vary from site to site.

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14.2 YES 14.3 The Code is an essential step forward. What has been produced is impressive, but it needs additional documentation if it is to get beyond academics and get support from those who might support and implement it. 14.4 The UK Peatland Code is a useful contribution to promoting peatland restoration and helps to increase the profile of peatlands and broaden the recognition of land-use projects in the UK’s voluntary carbon market. It also helps to promote the contribution of peatlands to helping meet Climate Change targets and emissions abatement more generally. We welcome the overall approach and it appears to mirror closely many of the features of the Woodland Carbon Code. However, it’s misleading to state (1.2 Using the Code) that it’s possible for projects to gain certification at present. We suggest this first (pilot) phase of the Code should concentrate on further developing the infrastructure for the Code eg. the science; supporting models/abatement estimates; registry functionality; accreditation of validation/verification bodies etc. This text has been revised as follows: “Initially the Pilot Phase will focus on further developing the infrastructure for the Code, including: testing and refining GESTs and developing a standardised field protocol for vegetation monitoring; developing registry functionality; and developing relevant procedures with accreditation of validation/verification bodies etc. These added functions will be developed by working closely with selected pilot restoration sites, with whom we will work towards validation and certification” 14.5 The Ecosystem services provided by peatlands are very significant and we welcome this trial to provide a monetary value to those services. 14.6 If it results in further restoration (additionality) then all well and good 15. Do you have any other comments on the Peatland Code which you would like us to

take into account? 15.1 A couple of thoughts spring to mind putting myself in the place of a non-technical reader... such as, will the final version have pictures? I hope so! And another other thought really is on the tone and who the doc is directed to? At the moment it seems like a mix of an explanation about the code and its background, alongside an indication of what it is about for people who might want to take part in such as scheme. Are you going to write a separate doc 'selling' the opportunity to investors? If not, maybe it would be good to strengthen the sell in the flier doc so that people who are thinking of taking part get a real feel for why they should go for it. Fr example, thinking on 'what do I get as a sponsor'...my question is how long does it take to restore peatland? Will I still be alive to see it? How long does it take to see carbon capture/ peatland plants grow back/ other visible benefits? See response to comment 1.2 – a separate leaflet will be produced with graphic design. 15.2 Generally content with the draft, subject above comments are implemented. Also note that the glossary is very useful. 15.3 In order to make the code more digestible, could the Code be split into sections aimed at different audiences, principally landowners and sponsors. It might be preferable to leave the existing Code but then provide some interpretation in simplified form that is aimed at different audiences. There needs to be answers to the questions that anyone showing interest in peatland restoration, as a landowner or sponsor, will ask initially. What will be in it for them? If they want to know more information, they can then be exposed to the full Code. The Code would benefit from some input from contractors with experience of carrying out peatland restoration work. Has some form of practical guidance about what peatland restoration

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involves on the ground. This would be of great value to landowners and managers. Case studies from the Pilot Schemes would also be of great value. See response to comment 2.1. 15.4 The Woodland Carbon Code steering group are very happy to assist the UK Peatland Code team during this next phase of development. Thanks for the useful feedback and ongoing support. 15.5 We understand that the majority of peat is in upland blanket bogs and therefore this will be the prime focus of the peatland code. However we would like to see some additions to the restoration options to make the code a little more relevant to a lowland situation. In the pilot phase it will be very important that monitoring is sufficient to demonstrate climate benefits. In the delivery phase there is a danger that legal and monitoring costs could make some smaller schemes less viable. Eventually, once the climate case has been made and proxy vegetation covers shown to be accurate, it will be important to make the schemes as cost effective as possible. Monitoring, consultation, legal agreements, etc should be proportionate to the size of the project. A codified approach is essential to make progress in protecting peatlands however it needs to be seen as more than an academic exercise to engender much wider support and investment. What happens on the ground is important. See response to comment 5.5. 15.6 Great to see progress on the Peatland Carbon Code. Unfortunately I have not had time to study it at length, but I have a few quick comments for consideration, which I hope are useful. Assuming this is what is meant, and to avoid ambiguity, section 2.2 could state more clearly that eligible activities are only those which involve re-wetting, or re-wetting in combination with other land management change required to re-establish peatland species. If that is not the intended meaning, clarification is required. This wording has now been adopted in section 2.2. Again, under 4.2, it could be made clearer whether for a project to be eligible, it must require all or just one of the four restoration techniques. This has been clarified now. Has thought been given to shallow peat soils (i.e <40/50cm)? Restoration, protection of and sequestration from shallow peat soils will still provide carbon benefits, though less than on deep peats. Some shallow peat soils whilst not deep, can be extensive. How does the IPCC guidance on wetland emissions due out later this year deal with shallow peat soils, and is there an intention to build this in to the code when available? In particular, degraded shallow peat soils on bedrock stand the potential to totally lose their soil coverage. The Lake District has around 65,000 hectares of shallow peats which could potentially be excluded, depending on what depth is decided. Based on feedback from WCC and others, we have adopted the same threshold peat depth as the Woodland Carbon Code, but will consider shallower peat soils for future phases. Similarly, where the guidance under 2.2 states that “for the purposes of the Code, peatlands include sites where peat deposits have been lost due to human activities…”, it would aid fair interpretation in stating that these must also at time of project start be greater than 40cm in depth.

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Under 2.3, the code limits sponsors of land based projects to sponsoring a maximum GHG emission reduction of 5% of their total GHG emissions. From what I can see, this is more stringent than the Woodland Carbon Code, which does not appear to specify a limit on a company’s sponsorship. As the Peatland Carbon Code will not be used to ‘offset’, at least in this phase of its development, it does not seem necessary to limit a company’s sponsorship if there is also a requirement (as in the Woodland carbon code) that they are also taking steps to understand and reduce their emissions. Inclusion of the 5% rule could potentially restrict willing sponsors, and it is not clear what is to be gained from including this rule when sponsorship is undertaken for CSR (corporate social responsibility) reasons, rather than ‘offset’ reasons. This requirement has now been dropped from the Code. 15.6 At Dinsdale Moorland Services we are looking to exploit our academic research of reliably measuring depths, density, moisture content and carbon sequestration within peatland in a commercial setting. 15.7 We think this is an interesting start and hope it can be developed further. 15.8 It is not clear whether avoided losses and transitional gains are included in the scheme. A severely degraded blanket bog, with large areas of bare peat bare peat and extensive gullying, requires a huge investment and potentially decades before it begins to actively accumulate Carbon from the atmosphere. It is unlikely that this scheme would provide the funds needed for this work without including the above factors in Carbon budgeting. These are included in the GEST approach – see: http://randd.defra.gov.uk/Document.aspx?Document=11329_NE0136_TechnicalAppendix.pdf 15.9 The wording of the document needs to be clear, concise and specific. Any ambiguity makes auditing to the code more difficult; there need to be clear statements of what is required. The requirements must be auditable and appropriate evidence must be available for each requirement. Any explanations can be contained within the guidance. Wording has been tightened throughout. 15.10 What you term co-benefits and I have previously seen as stacking of ES is clearly crucial to generating the full benefits of PES approaches for land managers. Ensuring that schemes enable payments for carbon, water, biodiversity from different sources is likely to be key to making the approach work, despite adding complexity. In our case we might in the future hope to see payments from carbon schemes, payments from the water industry (for storing, regulating and cleaning) and payments from the taxpayer (for biodiversity). Yes, the Code tries to keep the option of stacking payments for biodiversity open in future. 15.11 The issue of permanence extending beyond contract duration is a challenging one...our bogs are only 3000 years old and so the definition of permanence is difficult to align with this plus introduces a host of issues around long term liability beyond the time any payment is made. The definition of permanence has been revised. 15.12 In our situation molinia is perhaps our greatest reason for poor condition and our (poor) understanding of how best to manage this in the face of changes in grazing and external pressures such as N and acid deposition raises for me issues around ensuring flexibility in determining both reactive and proactive management and the space (despite the best intentions) to get it wrong. Restoration of Molinea dominated areas has not been included in the Code at present due to the insufficient evidence of GHG emission reductions after converting back to peat-forming

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vegetation. It may be possible to include this sort of restoration once more information is available to inform site types in the GEST approach. 15.14 RICS welcomes the approach taken to the development of a pilot code; in particular the commitment for practical pilot work for a year with an opportunity then to review progress and assess lessons to date. It is the view of our members that is imperative that new initiatives are tested and trialled very carefully. We believe that the code makes a clear case for itself, while conceding that investors may take some persuading at this stage to invest in schemes widely. However, given the desirability of pilot work, it may be appropriate for a limited roll-out in the first instance while the Code has an opportunity to prove itself, and to leave enough scope for further development and fine-tuning. The pilot phase will provide a limited roll-out. 15.15 RICS agrees that the Code has the potential to be a very helpful contribution to promoting peatland restoration. However, our members have raised concerns over the equal desirability of encouraging the active management of peatland which is not in need of restoration. While appreciating that this may not provide the same extent of additionality as the restoration of damaged peatland, it is nevertheless the case that active management of existing peat, in good condition, will continue to protect the atmosphere, will recognise longer-term commitments to good peatland management by land managers, and secure the on-going sequestration of carbon from actively managed peatland. RICS would welcome the continuation of this dialogue on the development of the Code. We recognize the need for this, and will explore options (e.g. similar to REDD+) during the pilot phase. 15.16 Land tenure: As we discussed there are sensitivities about this issue, particularly in relation to common land. At this stage the code needs to be very clear that the supplier is the “owner of the carbon” and that the code is not determining this in anyway. At present it reads as the supplier being skewed towards the “land owner” rather than the tenant or commoners (who often have turbary rights and may own the carbon). There are some ambiguous bits about “consulting” commoners which could potentially be taken as, the Lord of the Manor (for a common) getting the payment, rather than the commoners. We appreciate the practicalities for restricting eligibility at present to single owners rather than groups. However we would be keen to see the pilots exploring how the code could work in different tenure situations including on commons, with tenant farmers, freehold farmers as well as large estates and NGOs. We are explore a range of pilot sites including some where we can explore issues around working with commoners and tenants. Burning: As discussed, in line with the ambition of the highest environmental standard for the code, it needs to state that no burning can occur, rather than just reductions in burning frequency. We don’t have conclusive evidence that burning, even at low frequencies, is not affecting C storage and sequestration and need to take a precautionary approach for the pilot phase of the project. This also enables clear definitions of what is permitted within the code with respect to burning and reduces the risk of loss of carbon due to managed burns getting out of control. This change has been made. C Metric: It needs to be made very clear that Mas’s metric is of first order estimates and further work is needed. The code’s references to NE publishing the metric make it sound as though we have already approved it for use. It also needs to be made clear that this work on the development of the metric to date is NE and Defra funded work, not just NE. The text preceding the link states that these are “preliminary” GESTs and the subsequent text emphasises the need for them to be tested and refined.

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Payments for other ecosystem services: Further clarity is needed in the code to ensure additionality in relation to payments for other ecosystem services, which could be achieved by the same management actions (e.g. Page 14). The Code focuses on payments for climate regulation (carbon), bundled with payments for other servies, and does not attempt to layer payments for carbon with payments for other services that could be achieved from the same management activities. However, we have left the option for biodiversity offsetting from peatland restoration sides under the Code open, to be considered on a case-by-case basis. Past and current management: Recommend that consideration of past and current management is also included within the description, management plan and monitoring sections of the project documentation. This has been done. EIA and ES: P20 other provisions for assessing environmental impacts need to be considered if an EIA, ES or Habitats Regulations Assessment is not available. This is already stated in the guidance for section 5.4. Page 4: need to clarify what the “other options” are under the eligibility and Single Farm Payment section. This has been removed. Page 5: in note 2 there is reference to “using” ecosystem services that needs to be reworded to clarify that this is about claiming payment for the enhancement of the ecosystem service. This has been reworded. Page 6: suggest amend “three main types of peatland” to “three most extensive types of peatland”. This has been reworded. Page 17: Consultation requirement: Suggest that consultation is needed on all land holdings, not just those over 10ha. This has been done. Page 26: what does “strata” mean in the final paragraph? Sections – this has been reworded now. Glossary: this appears to have been based on the Woodland Carbon Code and there are still some references to woodland and afforestation in places. These references have been removed. 15.17 SC : P2 Replace “Greenhouse Gases” with “greenhouse gases”. Done.

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P3 (2nd para) Can we really monitor the climate?; P4 Replace “Effects on adjacent land” with “Potential effects on adjacent land”; P4 (last point) Is it contract lengths of 30 years or benefits for 30 years? See section 2.1 This text has been re-written for the leaflet now. P5 Replace “sponsoring restoration” with “sponsored restoration”; P6 Replace “in line” with “in line with” Done P9 Under requirement – should include cessation of cultivation or cutting? Could also include reprofiling (mentioned on P20). This requirement has been reworded to be more general now, with details under guidance. P9 Replace “SSKIB soil map from” with “Soil Survey of Scotland 1:250 000 soil maps from the”; replace “accuracy” with “accuracy at the required scale”; “This soil” - not clear here; replace “lost” with “partially lost”. Done P9/10 footnote 7 does not make sense where it talks about too many sites. Using 40 cm will give you more sites than using 50 cm (unless you mean lower in the sense of deeper!). This footnote has been deleted. P11 “(or providing an equivalent area of new peatland restoration)” – seems to be a bit of a let-out clause and is not desirable. It would mean starting again when restoration should really be permanent. This is not intended to be a “get out clause” but to be credible, there need to be credible penalties for non-compliance with the Code. P24 Replace “result drainage” with “result in drainage” Done P26 “direct empirical measurements”- direct measurements for verification would never be economic; the only exception might be sites also selected for research purposes (separately funded). We agree that it is extremely unlikely that such measurements would be used, but there is no reason to exclude them from the Code. P29 Definition of “organic soil” is wrong. It seems to be referring to peat at 50 cm but on p9 it has already been decided to use 40 cm (see next definition). However, an organic soil may well have far less organic material (e.g. peaty podzols), it is just a term for a soil as distinct from a mineral soil. Probably best to omit rather than cause confusion. This has been fixed. Are we calling this a pilot peatland code or a pilot peatland carbon code (PCC) - in different parts of the document we appear to be using different terms? This has been standardised to pilot Peatland Code. Page 2 3rd bullet – good linking to all the research undertaken. One small point - should be referred to as Defra/NE study rather than the NE study

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This has been clarified. The pilot code will be applicable to blanket bog at this point in time so is it worth clarifying this earlier on? The code says that this then applies to 95% of the habitat - does this cover lowland as well as upland as I thought that lowland peatland the science was less developed (and Defra doing work in this area)? Yes, the Code will apply initially to blanket bog only, which accounts for 95% of peatland habitats. This is now made clearer in section 1. P3 the code talks about only a limited number of sponsorship opportunities being available – does this risk putting sponsors unnecessarily off? This has been reworded in the leaflet (the overview section has been deleted). Will criteria for sponsorship take account of investor needs? These eligibility criteria have been dropped. P4: Would be interested to hear about the background to the Princes Countryside Fund and contributions from pilot code. Market research suggests CSR investors want social benefits in addition to environmental benefits, so PCF was selected as a social fund that could link explicitly to restoration sites, given their focus on upland deprivation. However, in response to feedback, this will now be extended to a menu of social projects for sponsors to choose from. The draft highlights that issues of combining with agri environment RDPE are under discussion - not quite clear what next steps are here? This needs to be followed up with Anne Humble from Welsh Assembly Government. P5 unquantified co-benefits - this makes it sound as if we would not have information on these whereas thought we would be able to get a handle on these co-benefits to some level? Projects for England highlighted as SWW and South Pennines - I did not think this has yet been fixed so does that make it sound too limiting? These references have been removed. P6 UK peatland code designed to provide scientific and regulatory basis - there could be different interpretations of what the regulatory basis relates to (especially now at pilot stage) so wondered if we needed to pick this point up in discussion? See response to comments under question 12. P7 use of WCC CBs – have they agreed to this already and who pays? They have not yet agreed to this, but we are in discussion with them and UKAS, providing there is funding for the Code to become UKAS accredited. P7 – you may want to at least briefly define was is meant by a group scheme even if we are saying this is not part of pilot. These have been defined now. P7 last para found confusing as seems to suggest for pilot phase no need to go further – if we are expecting different sections of the code to be read by different audiences do we need to clarify upfront who needs to read what?

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P8 2.1 I’m sure there is a good reason but I did not know why project start date eligibility shifts from jan 2010 to 2 years of start date between end of 2014 onwards? Also do we have any sense of how many might register before end Dec 2014? The start date has been set early to enable ongoing projects to be included in the pilot phase. No idea of likely numbers. Section 2.3 - how does this fit within a within a wider context of carbon reporting guidelines. Defra has recently published greenhouse gas reporting guidelines and wider environmental impacts at: https://www.gov.uk/government/publications/environmental-reporting-guidelines-including-mandatory-greenhouse-gas-emissions-reporting-guidance This section has been deleted now. 2.6 how much evidence is there to support the 15% assumption – worth testing out further? This is the same as the Woodland Carbon Code, and can be altered if necessary during the pilot phase. P14 mentions PCC registry – the WCC registry is about to be launched so wondered how much work will be involved – is that a IUCN project? This ideally needs to be funded as part of the pilot phase. P17 talked about sharing of buffers – any more info here? More detailed guidance will need to be developed during the pilot phase. P18 group schemes - perhaps need to have an explanation of what this means even if pilot scheme not incorporating Done P20 environmental impacts - it was not clear to me quite the level of requirements overall for environmental impacts beyond carbon – this requirement links to specifics around EIAs but would an EIA be required for all proposed projects or only in specific contexts? Only in specific contexts e.g. if involving tree felling. P21 – may be worth double checking with Phil Earl re: text for this section which looks fine to me in terms of meaning but this is Phil’s policy area and he may want this expressed in a particular way? Activities that may be included at a later date: · Projects that seek to avoid peat extraction/peat mining at a specific site. These are excluded because the strong markets for horticultural peat and fuel peat may lead to “leakage emissions‟, i.e. the shift to extraction from an alternative peatland. Additionally given DEFRA NEWP commitments re: phasing out horticultural peat means it may be difficult to demonstrate additionality. This text has been cut down and simplified in response to feedback. P23 – will the section currently linking to the VCS standard be changed to the new research we have done on carbon metrics? More detailed methods for calculating baselines are available as part of the VCS methodology for peatland rewetting, available here: http://v-c-s.org/sites/v-cs. org/files/PRC%20RDP%20GEST%20methodology.pdf Done

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p24 – we should be publishing this soon and will forward you the link but could you make sure this is updated to Defra/NE work – thanks Preliminary GESTs for UK peatlands have been published by Natural England here [link]. Done P27 Co benefits: with respect to text below - how sure are we that it could be layered in this way? Basic peatland restoration can also provide a foundation for other biodiversity creation or restoration projects and, where this land management is additional to the peatland restoration such management could access other income streams such as biodiversity offsetting funding. We are not sure, but we have been asked to ensure the wording does not preclude this as a future possibility. We do not provide much detail on how to calculate co-benefits apart from where there is a EIA – do you think this is an issue especially if we are presenting this as a peatland code rather than just peatland carbon code? See response to comment 12.7 !

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Appendix!3:!Market!Research!Report!!February!2013!!Prepared!by:! Alex!Inman,!Independent!Consultant!with!Mark!Reed,!Birmingham!City!

University!!!1.!Background!!Previous!market!research!on!the!market!for!peatland!carbon!was!conducted!by!BRE!in!2009,!commissioned!by!Natural!England.!This!suggested!that!demand!from!UK!companies!and!individuals!wishing!to!voluntarily!support!land@based!carbon!reduction!projects!could!exceed!1!million!tons!of!carbon!reduction!per!year!(and!could!potentially!exceed!10!million!tonnes),!with!demand!likely!to!come!from!both!individuals!(e.g.!offsetting!flights)!and!corporations!with!a!strong!brand!link!to!the!UK.!However,!the!report!provided!little!detail!about!the!motivations!of!different!types!of!companies!for!investing!in!peatland!restoration,!and!lacked!sufficient!detail!to!inform!the!development!of!a!Peatland!Code.!!!This!document!contains!a!summary!report!of!key!findings!from!market!research!undertaken!under!Work!Package!2!of!the!Peatland!Code!PES!pilot!research!project.!!The!aim!of!the!research!was!to!provide!a!better!understanding!of!the!propensity!for!businesses!to!invest!in!peatland!restoration!and!to!create!a!typology!of!likely!investors.!!Variations!in!business!attitudes!and!requirements!have!been!highlighted!where!identified!to!help!inform!the!development!of!the!Peatland!Code.!!!!!!!2.!Methods!!A!total!of!15!interviews!were!conducted!with!a!sample!of!businesses!from!retail,!insurance,!banking,!hospitality!and!utility!sectors!that!are!either!currently!investing!in!land@based!carbon!projects,!or!have!the!potential!to!do!so.!!The!majority!of!interviews!(12)!were!undertaken!with!businesses!from!the!corporate!sector!as!this!was!regarded!by!the!research!team!as!the!key!potential!investor!market.!!However,!3!interviews!were!also!undertaken!with!SME!businesses!to!ensure!opinions!from!‘non@corporate’!entities!were!captured.!!Respondents!from!corporate!businesses!were!senior!sustainability!professionals!and/or!carbon!managers!with!a!strategic!overview!of!environmental!compliance!matters!within!their!respective!organisations.!!In!the!case!of!SMEs!where!bespoke!sustainability/carbon!management!personnel!do!not!exist,!owners!or!senior!Directors!with!overarching!responsibility!for!strategic!decision@making!were!interviewed.!!Respondents!were!identified!through!a!combination!of!research!team!network!contacts,!web!searching!and!snowballing!(respondent!identified!leads).!!All!respondents!were!sent!recruitment!emails!seeking!assistance!to!participate!in!the!research,!followed!by!subsequent!telephone!interviews.!!Recruitment!and!interviewing!was!undertaken!between!7th!January!–!22nd!February!2013.!!!!!!

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3.!A!note!on!report!content!!The!content!in!this!report!represents!a!synthesised!distillation!of!key!points!and!observations!derived!from!the!interviews!undertaken.!!Respondent!confidentiality!precludes!comments!being!attributed!to!specific!individuals!or!organisations.!!Italicised!non@attributed!verbatim!quotations!are!included!within!the!narrative!to!help!illustrate!particular!items!raised.!!!4.!Main!Findings!!4.1!Attitudes!towards!carbon!projects!!The!sample!design!was!structured!to!include!businesses!either!currently!engaged!in!land@based!carbon!projects!to!some!degree;!or!willing!to!consider!investing!in!land@based!carbon!projects!at!some!point!in!the!future.!!Where!necessary,!it!was!explained!that!the!first!phase!of!the!UK!Peatland!Code!would!not!permit!offsetting,!but!that!this!might!become!possible!in!a!future!phase!of!its!development.!As!such,!given!the!focus!of!many!respondents!on!offsets,!much!of!the!discussion!focussed!on!offsets,!and!this!is!still!useful!for!the!development!of!the!code.!The!interviews!revealed!that!businesses!vary!considerably!regarding!their!experience!with,!and!attitudes!towards,!land@based!carbon!projects!and!carbon!offsetting.!!These!background!contexts!are!likely!to!have!a!significant!bearing!on!relative!propensities!to!uptake!peatland!carbon!investment!in!the!future;!and!the!mix!of!peatland!project!offers!which!are!likely!to!be!required.!!In!broad!terms,!three!categories!of!business!were!identified:!!• Businesses!for!which!investing!in!landKbased!carbon!projects!and!carbon!offsetting!is!

an!important!component!of!their!carbon!management!strategy.!!These!businesses!view!offsetting!as!a!valuable!tool!to!meet!carbon!emissions!targets!(either!mandatory!or!self@imposed)!and!have!detailed!knowledge!of!offsetting!options!and!the!carbon!credit!market.!!One!business!interviewed!has!recently!developed!economic!modelling!capabilities!to!assess!the!cost:benefit!ratios!of!offsetting!compared!to!further!investments!in!carbon!reduction!solutions!

!• Businesses!for!which!landKbased!carbon!projects!and!carbon!offsetting!is!a!peripheral!

component!of!their!carbon!management!strategy.!!These!businesses!are!very!large!carbon!emitters!(e.g!>3m!tonnes!p.a)!and!are!typified!by!the!energy!and!transport!companies!interviewed.!!For!them,!the!scale!of!carbon!emissions!they!produce!means!that!carbon!offsetting!will!only!ever!be!able!to!neutralise!a!small!fraction!of!the!carbon!they!produce.!!They!also!tend!to!fall!under!statutory!obligations!to!reduce!carbon!emissions,!and!have!historically!concentrated!on!investments!to!meet!these!targets!rather!than!undertake!what!they!see!as!‘additional’!carbon!offset!measures.!For!this!reason,!carbon!reduction!@!rather!than!offsetting!@!is!their!prime!focus!and!they!have!consequently!invested!relatively!little!time!investigating!the!pros!and!cons!of!different!offsetting!options.!!This!is!not!to!say!they!have!no!interest!in!carbon!offsetting!with!all!bar!one!of!the!interviewed!companies!fitting!this!typology!currently!investing!in!some!form!of!carbon!offsetting!scheme.!!The!important!point!to!note!is!that!their!primary!motivation!for!doing!so!is!to!fulfil!a!variety!of!objectives!relating!to!their!corporate!social!responsibility!agenda,!rather!than!the!offsetting!of!carbon!per!se.!!As!one!respondent!put!it,!‘offsetting!will!always!be!a!token!element!of!our!carbon!management!policy!due!to!the!sheer!scale!of!emissions!we!produce’.!!For!these!businesses,!therefore,!the!co@benefits!(non!carbon)!of!land@based!carbon!projects!and!carbon!offsetting!schemes!

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become!particularly!important!and!need!to!be!emphasised!to!attract!potential!buyer!attention!

!• The!unaware!and/or!unconvinced.!All!three!SMEs!interviewed!have!not!engaged!with!

land@based!carbon!projects!or!carbon!offsetting,!either!because!they!perceive!no!statutory!driver!or!because!they!have,!thus!far,!seen!no!marketing!advantage!in!doing!so.!!Those!corporate!businesses!that!have!thus!far!not!engaged!with!carbon!offsetting!have!adopted!this!position!due!to!the!perceived!reputational!risk!of!being!associated!with!this!activity.!!This!standpoint!appears!to!be!heavily!influenced!by!the!attitudes!of!key!stakeholders.!!However,!there!is!a!growing!appreciation!within!this!group!that!the!offsetting!market!is!maturing!and!becoming!more!regulated.!!In!addition,!the!recently!published!!mandatory!carbon!accounting!requirements!for!public!limited!companies!is!stimulating!a!renewed!interest!in!carbon!offsetting.!!Both!these!factors!suggest!these!businesses!may!consider!offsetting!in!the!future!subject!to!sufficient!reassurances!being!put!in!place.!One!business!interviewed!already!invests!in!woodland!planting!schemes!for!community!engagement!objectives.!!These!projects!are!managed!by!the!Woodland!Trust!and!are!funded!from!the!proceeds!of!a!particular!food!product!line.!!!!!!!!!!!!!!

!Possibly!not!surprisingly,!those!respondents!most!involved!with!carbon!offsetting!as!a!carbon!management!tool!(i.e!the!first!group!outlined!above)!were!the!most!knowledgeable!about!the!different!land@based!carbon!options!available;!and!were!the!most!concerned!about!quantification!of!carbon!sequestration!outcomes!from!any!given!scheme.!!Because!of!this,!they!appear!to!be!the!most!sceptical!audience!regarding!the!efficacy!of!land@based!carbon!(offsetting)!projects.!!4.2!Types!of!carbon!offsetting!schemes!currently!favoured!!Respondents!involved!with!carbon!offsetting!schemes!were!asked!to!express!their!views!on!their!current!preferred!options.!!This!sequence!of!questions!was!considered!important!by!the!research!team!to!better!understand!which!features!current!buyers!are!looking!for!and!how!a!peatland!carbon!option!might!best!be!positioned!in!the!marketplace!to!‘compete’!with!alternative!offerings.!!A!key!finding!to!emerge!from!the!research!is!that!all!companies!interviewed!are!investing!almost!exclusively!in!non@UK!based!schemes.!!To!a!certain!extent,!businesses!are!currently!being!forced!to!go!abroad!due!to!a!lack!of!UK!schemes!in!existence.!!However,!a!number!of!respondents!were!of!the!view!that!international!schemes,!particularly!those!based!in!developing!countries,!offer!the!best!returns!from!a!social/community!engagement!perspective;!characteristics!which!are!considered!extremely!important!‘in!the!round’!when!considering!carbon!offset!investments.!!‘More!than!carbon’!is!thus!a!selling!point.!!A!favourite!option!appears!to!be!projects!involving!the!provision!of!solar!powered!cooking!stoves!to!families!suffering!from!poverty!in!developing!countries.!!These!schemes!have!been!demonstrated!to!deliver!significant!health!benefits!by!eliminating!the!inhalation!of!wood!smoke!from!traditional!stoves;!whilst!at!the!same!time!resulting!in!quantifiable!reductions!in!carbon!emissions!and!associated!deforestation.!!Citing!solar!stove!projects!as!an!example,!one!respondent!commented!‘how!can!a!UK!land!based!scheme!compete!with!a!stove!scheme!in!Africa!which!will!prevent!poverty!stricken!children!from!getting!emphysema’.!!Geographical!scope!of!operation!also!appears!to!have!a!strong!influence!regarding!a!desire!to!invest!in!international!schemes.!!Respondents!representing!non@UK!owned!businesses!and!particularly!businesses!with!international!operations!have!less!interest!in!the!idea!of!UK!

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based!offsetting!schemes!than!those!businesses!whose!activities!are!predominantly!focussed!within!the!UK.!!A!desire!to!offset!emissions!near!to!where!they!are!created!and!build!community!relationships!becomes!more!dissipated!where!a!business!has!global!reach.!!This!fact,!allied!to!a!desire!to!adhere!to!Kyoto!principles!of!investing!in!developing!countries,!strongly!suggests!that!a!UK!peatlands!programme!will!be!a!harder!sell!to!multinational!corporations!than!business!with!a!national!scope.!!For!this!latter!group,!there!would!appear!to!be!an!appetite!for!UK!schemes,!including!peatland!schemes,!provided!that!social!and!educational!co@benefits!can!be!demonstrated!(see!above).!!A!key,!perhaps!obvious,!advantage!of!UK!schemes!is!that!they!can!be!visited!and!verified!far!more!easily!than!projects!operating!abroad,!which!may!reassure!potential!investors.!!In!terms!of!the!type!of!scheme!invested!in!–!renewable!energy,!clean!technology,!or!land!management!based!–!there!is!currently!a!strong!preference!for!technology!based!offsetting!schemes!over!the!land!based!options.!!This!stems!from!a!belief!these!schemes!carry!less!risk!in!terms!of!not!delivering!on!carbon!outcomes.!!Respondents!also!considered!these!schemes!to!be!an!‘easier!sell’!to!their!customers!and!key!stakeholders!than!land!management!schemes,!the!benefits!from!which!are!‘not!always!immediately!identifiable!by!the!lay!person!and!require!greater!effort!to!explain’.!!4.3!Specific!attitudes!towards!land!based!schemes!including!peatland!restoration!!As!indicated!above,!respondents!exhibited!a!general!air!of!scepticism!regarding!the!efficacy!of!land!based!schemes!to!store!carbon!over!the!long@term.!!The!recent!introduction!of!the!Woodland!Carbon!Code!has!helped!to!improve!confidence!in!woodland!carbon!schemes!although!fundamental!concerns!remain!regarding!additionality,!performance!(e.g!carbon!loss!through!fires)!and!double!counting.!!!!All!respondents!bar!two!equated!land!based!schemes!with!woodland!planting!and!did!not!have!awareness!of!other!habitat!management!options!including!peatland!restoration.!!Woodland!planting!is!seen!as!having!immediate!resonance!with!the!general!public!unlike!the!restoration!of!peatlands!which,!it!was!suggested,!might!be!considered!‘remote,!inhospitable!and!a!little!abstract….a!difficult!sell!to!our!customers’.!!However,!peatlands!were!considered!to!have!a!distinct!advantage!over!woodland!in!relation!to!long!term!carbon!storage!potential.!Having!said!this,!one!respondent!expressed!concern!over!the!long@term!viability!of!peatland!carbon!storage!in!the!face!of!climate!change!predictions.!!Where!woodland!planting!and!peatland!restoration!scored!highly!with!respondents!was!the!perceived!ability!of!these!projects!to!be!directly!linked!to!a!sustainable!product!sourcing!agenda.!!For!example,!businesses!using!wood!in!their!production!processes!or!end!products!felt!carbon!offsetting!through!tree!planting!could!deliver!significant!marketing!benefits!from!a!sustainable!sourcing!point!of!view.!!Similarly,!it!would!seem!retailers!selling!peat!based!products!(e.g!plant!medium,!compost)!perceive!a!benefit!from!being!associated!with!peatland!restoration!programmes;!given!the!negative!publicity!surrounding!peat!extraction!for!the!horticultural!and!recreational!gardening!sectors.!Another!perceived!benefit!of!peatland!projects,!cited!by!respondents!from!energy!providing!businesses,!would!be!the!ability!to!offset!the!landscape!and!biodiversity!impacts!of!powerline!and!other!infrastructure!installations!in!the!immediate!vicinity!where!these!disruptions!occur.!!!!Given!the!concerns!raised!with!land!based!schemes,!it!is!likely!–!even!in!relation!to!those!businesses!positively!disposed!to!the!notion!–!that!very!few!businesses!will!be!prepared!to!put!all!their!eggs!in!one!basket!i.e!place!all!their!offsets!with!land!based!projects.!!When!

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prompted,!respondents!suggested!they!might!place!20%@30%!of!offsets!in!land@based!schemes,!the!remainder!spread!across!renewable!energy!and!clean!technology!programmes.!!4.4!Attitudes!towards!the!UK!Peatland!Code!proposition!!!Respondents!were!asked!to!comment!on!particular!attributes!of!the!proposed!UK!peatland!code!and!related!peatland!restoration!programme.!The!key!findings!from!this!exercise!are!outlined!below.!!Importance!of!recording!peatland!investments!within!carbon!accounting!and/or!being!able!to!trade!peatland!carbon!on!voluntary!or!compliance!markets!!A!majority!of!respondents!interviewed!believed!not!being!able!to!record!peatland!carbon!within!their!carbon!accounts!or!trade!peatland!carbon!credits!would!be!a!major!stumbling!block!to!their!involvement.!!In!the!words!of!one!respondent,!‘if!people!want!to!give!money!away!on!CSR!ventures!that’s!fine!by!me!but!we!would!need!a!direct!business!case!to!justify!getting!involved’.!!However,!there!were!some!noticeable!exceptions!to!the!rule;!particularly!amongst!those!corporate!businesses!for!whom!offsetting!is!a!peripheral!component!of!their!carbon!management!strategy.!!In!addition,!SME!respondents!expressed!far!less!interest!in!carbon!accounting!and!credit!trading!functionality!due!to!their!relatively!low!levels!of!interest!in!the!carbon!benefits!of!the!proposed!peatland!programme!per!se.!!Importance!of!co@benefits!!Without!exception,!all!respondents!would!be!looking!for!co@benefits!from!peatland!carbon!offsetting!projects.!!As!noted!above,!social/community!engagement!outcomes!are!seen!as!extremely!important,!which!in!the!case!of!land@based!projects!may!include,!for!example,!provision!of!green!infrastructure!and!public!access!to!the!environment.!!In!terms!of!additional!environmental!outcomes,!biodiversity!protection/enhancement!is!top!of!the!list.!!One!company!is!currently!sponsoring!research!into!mango!swamp!carbon!projects!due!to!the!envisaged!habitat!benefits!for!fish!stocks!from!this!type!of!land!use.!!There!is!also!a!significant!interest!in!the!protection!of!high!value!biodiversity!sites,!this!interest!seemingly!being!driven!by!stakeholder!and!customer!concerns.!!One!respondent!suggested!any!future!peatland!carbon!programme!should!promote!the!uniqueness!of!UK!peatlands!to!attract!the!attention!of!would!be!investors.!!Also!important!is!the!conservation!and!protection!of!water!resources!and!water!quality.!!Businesses!using!significant!quantities!of!water,!either!directly!in!their!operations!of!embedded!within!their!products,!are!keen!to!demonstrate!they!are!taking!action!to!mitigate!adverse!impacts!on!the!aquatic!environment,!and!see!peatland!restoration!as!a!potential!means!of!doing!this.!!Quantification!of!carbon!and!other!co@benefits!!Respondents!were!asked!to!comment!on!the!level!of!accuracy!they!would!want!under!the!code!regarding!the!quantification!of!outcomes!from!peatland!restoration!projects.!!Responses!were!highly!consistent.!!For!carbon!sequestration,!precise!quantification!would!be!expected!if!peatland!carbon!was!to!be!made!available!for!carbon!reporting!and!trading!purposes.!!For!co@benefits,!respondents!appeared!to!understand!the!complexities!surrounding!the!measurement!of!variables!such!as!biodiversity,!water!purification!and!flood!attenuation.!!For!these!benefits,!some!form!of!probability!distribution!underwritten!by!an!

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expert!panel!or!recognised!authority!(e.g!Wildfowl!and!Wetlands!Trust)!would!be!sufficient.!!Those!respondents!aware!of!the!Woodland!Code!suggested!this!might!provide!an!initial!template!for!co@benefit!measurement.!!Others!suggested!the!measurement!of!co@benefits!would!need!to!be!developed!as!a!‘transitionary!process’!over!time!during!which!quantification!methods!would!be!improved!and!refined!in!consultation!with!project!partners.!!!Management!of!the!Code!!Opinions!varied!regarding!institutional!arrangements!for!the!governance!and!operation!of!the!Code.!A!minority!of!respondents!felt!the!Code!should!be!sanctioned!by!government!to!give!it!credibility.!However,!most!did!not!see!a!need!for!government!involvement,!suggesting!lack!of!government!regulation!within!the!existing!voluntary!carbon!market!has!not!significantly!hampered!its!development!thus!far.!!Of!most!concern!to!the!majority!of!respondents!was!a!need!for!the!Code!to!be!developed!and!managed!as!an!‘independent!standard’!and!for!any!subsequent!carbon!credits!to!be!registered!to!avoid!the!risk!of!double!counting.!!!!Whilst!a!small!number!of!respondents!appeared!to!favour!the!involvement!of!specific!entities!in!the!development!and!management!of!the!Code!–!e.g!The!Carbon!Trust,!Energy!Saving!Trust,!WWF!–!the!majority!expressed!no!preference.!!For!them,!proven!scientific!competence!was!the!key!attribute.!!All!respondents!were!unanimous!in!the!wish!for!the!Code!to!be!administered!by!a!not@for@profit!organisation!i.e!either!public!or!third@sector,!not!a!commercial!business.!Developing!the!Code!in!partnership!with!a!multi@stakeholder!steering!group!was!suggested!by!several!respondents!as!a!way!forward.!!!Joint!branding!of!peatland!restoration!projects!!It!is!likely!that!in!order!to!generate!sufficient!investment!to!finance!a!particular!peatland!restoration!project,!multiple!sources!of!funding!may!in!some!situations!be!required!from!more!than!one!donor!organisation.!!This!will!mean!any!given!corporate!investor!will!not!have!‘sole!ownership’!over!a!specific!scheme.!!Respondents!were!asked!to!consider!this!scenario!and!express!their!views!accordingly.!!With!one!exception,!respondents!did!not!see!any!problem!with!being!co@contributors!to!a!scheme.!!Recognition!of!their!investment!at!site!locations!is!regarded!as!important!(e.g!company!logos!on!notice!boards)!but!respondents!expressed!no!concerns!having!their!logos!alongside!other!brands!per!se.!!The!only!stipulation!would!be!that!other!brands!are!reputable!and!not!direct!competitors.!!Also,!it!was!felt!contributions!from!investments!would!need!to!‘equitable’!whereby!a!relatively!small!contributor!to!a!scheme!should!not!be!able!to!free!ride!on!the!larger!investment!of!a!major!investor.!!In!order!to!maximise!brand!recognition!opportunities!whilst!recognising!the!relative!size!of!investments,!some!respondents!articulated!the!idea!of!attributing!specific!‘zones’!of!a!restoration!site!to!particular!funders,!apportioned!to!the!size!of!financial!investment!made.!!Preferred!geographical!location!for!investments!!!It!became!very!clear!from!the!interviews!undertaken!that!businesses!positively!disposed!to!UK!peatland!carbon!investment!will!want!to!place!their!investment!with!projects!as!near!as!possible!to!locations!where!they!have!a!significant!presence!i.e!locations!where!they!have!large!numbers!of!customers!or!staff.!!For!example,!respondents!from!food!retailers!

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explained!they!would!be!interested!in!peatland!restoration!sites!near!major!retail!outlets.!!A!respondent!from!a!financial!services!business!could!see!the!benefit!of!investing!in!sites!near!their!Head!Office!where!a!significant!proportion!of!the!company’s!employees!reside.!!!The!interest!in!geographical!proximity!stems!from!a!belief!that!it!will!be!much!easier!to!promote!the!benefits!of!a!given!peatlands!investment!to!people!who!live!nearby!as!opposed!to!individuals!with!‘no!geographical!connection’!to!the!site!in!question.!!Where!staff!are!concerned,!respondents!believed!the!opportunity!for!staff!to!get!‘hands!on’!with!local!peatland!restoration!programmes!would!meet!a!number!of!workforce!development!and!employee!relationship!building!objectives.!!A!place!to!accommodate!‘team!building!away!days’!would!be!an!additional!benefit.!!!!!Pricing!!Respondents!were!universally!of!the!view!that!UK!peatland!carbon!project!investments!will!be!more!expensive!–!per!tonne!of!carbon!–!than!‘cheap!carbon’!projects!based!abroad.!This!was!seen!as!completely!acceptable,!given!the!envisaged!multiple!benefits!that!will!be!generated!from!UK!peatland!schemes!compared!to!cheap!non@domicile!options.!!Where!respondents!believed!they!will!struggle!to!build!a!case!in!favour!of!UK!peatland!carbon!premium!prices!is!where!these!prices!significantly!exceeded!non@UK!based!projects!that!also!deliver!discernable!multiple!benefits.!!It!is!therefore!the!price!differential!between!UK!peatland!carbon!investments!and!non@UK!based!multiple!benefit!schemes!(rather!than!other!UK!land@based!schemes!such!as!forestry)!which!is!likely!to!be!a!key!attribute!influencing!market!share!for!the!UK!peatland!carbon!programme!going!forward.!!!!!Linked!to!a!preference!to!invest!in!specific!sites!local!to!operational!activities!as!outlined!above,!respondents!also!reacted!favourably!to!the!idea!of!bespoke!pricing.!!This!is!where!individual!UK!peatland!carbon!projects!would!be!priced!differently,!according!to!the!blend!of!co@benefits!delivered.!!Respondents!believed!this!transparency!would!enable!potential!purchasers!to!understand!the!value!of!their!investment,!making!it!easier!to!‘justify!premium!prices!to!boards!of!Directors!and!shareholders’.!!The!subject!of!premium!prices!yielded!an!additional!and,!potentially!extremely!useful,!insight!into!the!lack!of!interconnectedness!in!corporate!decision@making!regarding!carbon!offsetting!in!general,!and!the!selection!of!carbon!credits!(including!land@based!carbon!projects)!in!particular.!!It!appears!to!be!the!case!that!the!management!of!carbon!within!the!corporate!sector,!including!the!purchasing!of!carbon!credits,!often!takes!place!in!isolation!from!operational!departments.!!These!departments!may!have!an!interest!in!specific!co@benefits!offered!by!a!given!carbon!offsetting!scheme!and!may!be!prepared!to!build!a!business!case!to!fund!these!benefits.!!However,!if!they!are!not!consulted!when!carbon!credit!options!are!being!chosen,!the!full!extent!of!their!‘willingness!to!pay’!is!not!taken!into!account.!!Carbon!managers,!under!pressure!to!purchase!cost!effective!carbon!credits,!may!well!go!for!a!cheaper!option,!precluding!the!uptake!of!more!expensive!premium!options!capable!of!delivering!optimal!co@benefits.!!One!respondent!explained!this!conundrum!very!clearly:!‘the!business!case!to!fund!premium!UK!peatland!offsets!will!need!to!link!these!offsets!to!the!nonEcarbon!related!impacts!of!the!product!lines!we!sell.!!It!will!be!very!difficult!to!sell!the!idea!of!a!premium!priced!scheme!unless!one!or!more!of!our!individual!business!divisions!are!happy!to!pay!for!specific!coEbenefits!produced!of!relevance!to!their!sphere!of!operation.!!Each!division!will!need!convincing!of!the!business!case’.!!!!!!!!

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There!may!well!be!a!need,!therefore,!for!premium!carbon!schemes!such!as!the!proposed!UK!peatland!restoration!programme!to!be!marketed!at!multiple!audiences!within!the!business!population,!not!just!those!specifically!responsible!for!carbon!management.!!!

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5!Conclusions!and!Recommendations!!Based!on!the!insights!gained!from!the!interviews!undertaken,!it!is!possible!to!offer!a!number!of!conclusions!and!recommendations!to!help!guide!the!development!of!the!UK!peatland!carbon!programme,!whether!initially!on!the!basis!of!Corporate!Social!or!in!the!longer@term,!as!an!offsetting!scheme.!!In!terms!of!the!likely!key!target!market!for!both!the!initial!roll!out!(phase!1)!of!the!programme!and!subsequent!phase!2,!corporate!businesses!with!a!substantial!UK!customer!and/or!employee!base!within!relatively!close!proximity!of!peatland!restoration!sites!are!likely!to!be!most!receptive!to!the!peatland!carbon!agenda.!!For!these!businesses,!the!opportunity!to!build!brand!awareness!and!loyalty!with!customers,!external!stakeholders!and!staff!by!investing!in!local!peatland!projects!which!deliver!multiple!social!and!environmental!benefits!is!an!attractive!proposition.!!Given!the!perceived!array!of!co@benefits!derived,!this!business!segment!is!likely!to!display!a!higher!propensity!to!pay!a!premium!price!for!peatland!restoration;!provided!the!benefits!can!be!clearly!communicated!both!internally!and!externally.!!This!market!appears!populated!both!by!businesses!viewing!land!based!carbon!schemes!as!a!genuine!carbon!management!vehicle!and!those!for!whom!CSR!outputs!are!the!main!prize.!!It!is!also!likely!that!a!smaller!(in!total!potential!investment!terms)!market!exists!within!the!SME!sector!amongst!businesses!for!which!investing!in!local!peatlands!will!deliver!some!form!of!direct!marketing!advantage.!!The!prime!candidate!here!is!the!tourism!and!leisure!sector!where!a!business!case!between!investment!in!the!local!environment!and!increased!exposure!to!current!and!potential!customers!can!most!readily!be!made.!!For!these!businesses,!carbon!management!is!not!the!primary!driver!behind!their!interest.!!Given!investment!by!SMEs!is!likely!to!be!relatively!low!(per!business)!and!given!that!the!transaction!costs!associated!with!raising,!collecting!and!managing!this!investment!may!well!be!high,!careful!consideration!will!need!to!be!given!to!the!business!case!and!mechanisms!associated!with!mobilising!this!investment.!!It!will!be!more!difficult!to!attract!investment!from!corporate!sector!players!with!international!reach,!where!the!UK!is!a!relatively!small!part!of!their!total!business.!!As!pointed!out!above,!for!these!businesses,!carbon!management!and!social!goals!have!a!global!dimension.!!Because!they!are!already!able!to!purchase!carbon!credits!from!schemes!located!abroad!that!show!demonstrable!social!and!educational!outcomes,!it!will!be!more!difficult!to!sell!premium!priced!UK!schemes!to!these!businesses!if!UK!options!are!more!expensive!and!not!able!to!demonstrate!a!better!cost:benefit!ratio.!!!!!In!all!cases,!whether!businesses!display!significant!interest!in!UK!peatland!carbon!or!only!marginal!interest,!relevant!personnel!in!these!businesses!will!need!to!be!supplied!with!targeted!literature!(and!accompanying!fact!files)!‘selling!the!case’.!!With!one!exception,!respondents!of!all!types!were!quick!to!point!out!their!knowledge!and!understanding!of!peatland!carbon!was!very!limited!and!in!many!cases!non@existent.!!They!hope!the!proposed!UK!Peatland!Code!will!provide!a!suitable!‘one@stop@shop!information!hub’!to!facilitate!this!learning.!It!is!therefore!important!that!some!thought!is!given!to!the!accompanying!information!provided!alongside!the!Code,!to!explain!the!carbon!and!co@benefits!of!peatland!restoration!in!terms!that!investors!and!their!stakeholders!can!easily!understand.!It!was!possible!to!detect!during!the!interviewing!process!that!the!target!audience!for!the!UK!Peatland!Code!–!sustainability!professionals,!carbon!managers!and!those!people!heading!up!operation!divisions!–!have!very!little!time,!and!require!succinct!and!clear!messages!on!peatland!performance!and!outcomes!to!gain!their!attention.!!

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It!is!recommended!that!to!identify!an!initial!shortlist!of!investors!for!a!peatland!carbon!scheme!(once!the!Code!has!been!developed),!a!GIS!mapping!exercise!should!be!undertaken!around!each!peatland!restoration!site!under!consideration.!!All!businesses!with!a!location!within!a!30@50!mile!radius!of!each!site!should!be!identified!and!screened!using!a!desk@based!exercise!to!identify!their!position!within!the!proposed!typology,!size,!industry!sector!and!most!importantly!their!scope!of!operation.!!Suitable!profiling!data!from!business!directories!such!as!Dun!and!Bradstreet!or!Experian!should!be!employed!for!this!exercise,!yielding!an!initial!list!of!businesses!to!be!approached!in!the!first!instance!to!ascertain!their!interest!in!peatland!carbon!investment.!! !

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Appendix!4:!Leaflet!!!Supplied!as!separate!PDF!document!via!this!link:!http://www.iucn@uk@peatlandprogramme.org/peatland@code/for@sponsors!!